CPE - Earnings call transcript Q2 2021

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Operator

Welcome the Callon Petroleum Company's Second Quarter 2021 Results and Operating Outlook Webcast. All participants will be in listen-only mode.

As a reminder, this call is being webcast and a replay of the call will be archived on the company's website for approximately one year. I would like to turn the call over to Mark Brewer, Director of Investor Relations for opening remarks. Please go ahead, sir.

Mark Brewer

Nick. much, very you Thank Good morning join the to for thank conference call you our taking this time and morning. With me Dr. Officer; Chief and are Joe Gatto, President Executive Jeff Officer; Chief Vice President and Balmer, Haggard President Officer. Kevin Senior Operating Financial Chief Senior Vice and and

be we'll presentation, along website. acquisition the earnings of to our which are remarks, with prepared result Delaware the our referencing During afternoon Basin both presentation posted yesterday

you encourage I everyone So, already. the if to haven't presentations download

the within section You and the Presentations website can www.callon.com. of slides Events at located find our our on page Investors

due Before cautionary call we presentation. measures Actual factors comparisons the to we acquisition periodic and SEC facilitate begin, refer estimates results the that peers. Slide these disclosures review and to materially refer we'd today, and X across financial also like to the today's periods of remind statements differ included could We'll to some in everyone make to to slides earnings plans. X non-GAAP important Slide which of our filings. our presentations with on some our and noted disclaimers forward-looking help and X during and believe on statements We'll

non-GAAP measures the corresponding we measure. provide we a nearest reconciliation to reference GAAP any For

appendix the on in of the which You our these reconciliations are website. press release, may find in earnings slides available earnings presentation to our both

call results the Following our turn announced our and acquisition. quarterly to related prepared like At the to remarks, we'll point, both open Q&A the Joe call to this I'd Gatto. for over

Joe Gatto

us everyone Mark. Thanks, Glad have for today's join call. to

life and stated The Primexx delivering into execution Basin and model the the of to capital Delaware step our high-quality XXX,XXX our well forward Delaware scale value model basin. our makes capture across is oil performance costs our lowering solid results all in similar delivering of the Delaware years the strategic creates logical is over from a proven development consolidates acres. multiples net but and consistent we our expanded across very cut in operational to metrics repeatable the in base field asset transaction, increases next operating our and base along we of efficient valued recent footprint. ability addition us Southern quarter application through the with announced a and have As synergies advancing a agreement relative last for re-screens three properties accretive the to anticipate acquire initiatives. This The core yesterday results at upside And Mark mentioned, deals. the and in all comparable the to of position attractive knowledge another

after the senior Once our expense, statistics. our lower occur and of to owns This the paid. BOE agreed shares the approximately interest complete, that second Energy strategic capital robust In with deleveraging equity XX% improve and impact total merits, of of over XX,XXX approval rates financial benefits addition with outlook million and to leverage debt already require the of lien through assets, from acquisition over almost Primexx we reinvestment of will closing vote to currently forward production Along and cash flow absolute cash shareholder the party our lower Kimmeridge of of of the majority shares will secured common will $XXX incremental shares, Primexx complement the we've day approximately required. for and senior X% additional more secured the will exchange day reduce in balances consideration a realized acquisition the which this step per debt X% that the substantial of component we notes transaction. addition have issue one the free a the

higher to the beyond of interest speak all forgo the what positive a financial Q&A, driving across process the for each while plenty presentation metrics. impact, to slides materials time is having tremendous key accretion deliver the press acquisition level in of also In of earnings quarter combination in going the acquisition of Importantly, we through normal per and exchange the for and of in are our walking the points release. information the layer second additional the around and share

off well. cut line great performance the activity increasing A nearly tracking climbing in expenses as than was XX% During of July start completion G&A high oil heads with our second capital June our in quarter, expected. throughout spot second against on quarter all relatively with plan production, level operating to better us a volumes from and in the to

acreage X.X program approximately run upon to being as year, fold we for by year. this activity two Based off legacy XXXX. operations an expected executed of into position the later second current planning half quarter fourth rigs our hand the acquisition, a the will rig on are in close early We from the in we of the Primexx strong

into that enter a our quarter our contributing to flaring roll and in to significant before supporting continue turning strides was cash operating of will discussion to improve ESG were recently progress, Delaware, The Permian over year Jeff issued on production and assets our cash margins we - the margins. of bolster a of efforts to Primexx making of Second increase touch highlights an I'll contents required required corporate broader strong oil things Sustainability total margins off. in tremendous and XXXX the that safety. forward hedges on operations. cash in as for the from XXXX further Report addition current to emissions the continue development

gas pressure reduce water also the will event of further facility constraint; impact that from times, on not will to potential have our our improve only capacity. infrastructure uptake recycling Some contingency burden select recycling run water daily outside This well. options reducing on will base for party initiatives as increase in structure, the than an of a our as a efforts, benefit significant securing in the more examples which with local cost gathering double include a natural alternative Primexx third working back will our and positive but systems, on the resources vendors compressor

current discuss and insights over our going the Jeff Now some to acquisition. operations things Primexx turn to offer to on

Jeff Balmer

everyone and morning thank Good Joe. you,

Joe a operational mentioned, we had solid really quarter. As

to able Our during drilling Eagle the the significant the the the to team first for This with progress with carry in consistent In half importantly of per Delaware and excited the seen on in achieved has the been our more rapid Ford line very day on instance year us costs coupled lowerings the we've Ward In very position County. continue Delaware we Reeves in completion in our opportunities. we're drilling and improvement drilling outstanding on progress County. hold the over lateral the par future from improvement XXXX of have has Howard on make continued stats. footage County much Midland efficiency Midland to to seeing Basin, our about Basin, the side both is

with crews, XX%. was quarter been base. in an complete were Primexx even with wells And than Delaware in per refine better value we with almost we've speaking best advancements Those acquisition, an With and expect asset very and take efficiency very efficiency of the to quarter acreage mentioned second it XX have day. really materialized an check third have production approach, results e-frac quarter even about an couple one has developing we bump busy improved Costs and while places has new lateral improvement cost incredibly team seeing Again with significant in and begun produce clearly for as in continuing push the manner and The to other Delaware climbing completions foot current lowered two enviable previously July. And practices more Primexx with the footage better a specifically position. Those the stats. drop. to those continued and the efficiency. high able team our future our XXXX strides wells. gains in spot and production which making we us them per until continue pad the in along learnings seen well a we the XX% we environment From improved adjust turn full-time pricing as were in have capital costs every the of of now, the tremendous to area remain where we're the to crew

map highly we have importantly, the has step into quality inventory zone. an out immediately This that capital speaking XXX have us to specifically opportunity And I'm throughout feed our which associated to to compete it about into advantaged position and has that contiguous primary locations data just robust in high infrastructure helped We the limiting development acreage. the our oily for the the models, subsurface is plus program. core results

development is important zones have development larger other long focusing Equally capital is of there as continue the results. available. zones So and clear projects. ability the efficient lateral primary on repeatable proof to But

available I our of combination we our with our operations, cost predictability that these roughly exploit to we every out laterals, and of opportunity at uncover to and costs core and locations clearly. foot of can to mile more Carrizo, ensure So XX% results over the improve keep we with our X seen lower mile very Delaware. shift as the per low After set think development activity X.X you've lateral to

of when to potential partners. of talking and in a looking already developments stacking, the downtime over flaring. course Kevin completion have and geo-mechanical spacing facilities doesn't these optimize vendor targeting leverage we're and turn to of around our hurt to understanding our financials is discuss to running models to things And optimize extra team course pad few and it going to to reduce geometry also Our fracture transaction. the our teams rigs implement quarter I'm and geologic advanced to and and larger

Kevin Haggard

first looks quarterly a cover Thanks a I've bit to got Callon. quite with Jeff. on It like call my

As are Delaware development both across exceptionally our a had leverage fit Equally financial enhanced and expected with equity the Joe outcomes the growing the and I second both position notes. assets asset impending base. have discussed the conversion well lien the our of more opportunity these of approach acquisition important robust to and Jeff

that our priorities. must We have any consistently advance acquisition strategic said

this As all deck, those we show we boxes. on slide the believe checks acquisition combination

free proceeds equity free any credit more of accelerated recent ability the to and barrels investors. overall share XXXX mature acquisition corporate received In these core swaps ensures against we moving approximately lien of X,XXX oil, well approximately and in near-term are reduced secure cash few in cash balance terms activity, we to weakness. the day acquisition, sheet second XX year-end at an weeks, levels approaching deleveraging should hedging position transaction barrels improved year-end fully at are for issued free have of hedges financial including of the XX-XX. time. significant S&P oversubscribed XXXX. at we acquisition, strip at be by With the and cash improve we senior allow Primexx is senior an progress $XXX XXXX the now all under based flow, flow this with on in and supplemented With This ahead delivering current improved lower of the deleverage We strip deck, both on prices is to capital. for percentages, conservative pay an Late past proceeds. markets effect maintaining from flow, further with hedge associated price $XXX believe focal we of notes which securing cash significant XXXX with prudently notes current of capital by case us to $XXX We our we if per WTI advance added Collar our paying over to of should this we through timetable to issuance. cash of our XX to and for facility yield WTI, and have the pace and this to free costless in opportunity enhanced the been finally, million per cash upgrades our positions the in planning June, million but proves from per cash. the And XXXX conservative Our upsized on borrowings our meaningfully price the down has financing sheet. flow and flow for possess one path promise we assumptions, accurate. amount divestiture of to around the for conversion. balance our team. upside speaking our inclusive that high and be X-year, visibility deleveraging equity can we this use debt of and we our market Moody's commodity cash This accessed are With and transaction, received an million Operating yield unsecured After flow the benefits that continue Even the made despite points expectations RBL. flow our barrel that current free planning the on the redeem historical turn both protect will cost in place hovering XX

However, to if At Joe. to we liquidity see extending our continue look there I'd to increasing will us to this point, are capital and these a maturity term portion over the the to turn markets allowing out cash back on runway. needs, of focusing to like call opportunities

Joe Gatto

of with Thanks spent both an Kevin. the quarters consistent comments quick attractive I'll debt in We financial value equity couple past proposition working for execution prudent wrap to up with here. action. a and investors our several re-establish

free our sustainable outlook on cash improved capital Our second operations time. an commitment over again to quarter delivered in is flow efficient that performance once

Primexx a synergy accelerate are from complimentary an for work our on investment, model asset that cash ready for and expanded we value that, share acquisition, inventory and to with elevate that will execution basis. with on operational base will operator, flow opportunities absolute think per the only the With for for shareholders immediate put repeatable increased open Delaware I here an will up to of capture we that Q&A. deleveraging proposition And free through several

Operator

[Operator Instructions] Capital from RBC Please First question Scott Hanold, go Markets. ahead. comes

Scott Hanold

acquisition. heavy to looks this lot Congrats day lifting to It a on the like it of is where now. get

your little and mixed, the the answer observation is this data, what well wells, - you look kind is just of of a and obviously confident we when clarify, of of - XXX you A - a that B Can you more the most the maybe too, of that see confidence Wolfcamp what Delaware kind level acreage we you what at speak and they can in gives mix map, inventory in got? of can - high of bit a just necessarily the part if Just in and specifically that you when the bit to pull how that? southern do quality question of but those is a a you obviously a us compete more it not just just stuff you could seems give and

Jeff Balmer

Jeff this Balmer. is Absolutely,

acreage very Primexx complicated things, but diligent You're operator a - exactly it's a right little B. outstanding and more an primarily seismic becomes Wolfcamp Wolfcamp and been perspective and The has other they've and from prudent the approached team A again how things.

development And are initial so, spacing stacking the data that's been gathered, the the program, initial thoughts solid. and on

basis, scale that's on to So when in into robust we strong philosophy some roll the kinds everything variability measures full well all well. that to development wells to things, those to acreage this an the be when it's contingent while - own flaring that acquisition. of way eliminating and acquisition expected. And all extremely you're have excellent you into our normally very very results well to for we roll and if have it you will That an again up down individual and heavily analysis facilities, distribution come weighted trying be rightsizing there, get performing out our is going wells of inventory

Joe Gatto

loading Scott as profit their water improved completion What that. with reducing designs and modifying done over time seen Yes with we've follow-on has like time. we've with just over program, and

those value picking both - to whole footprint, a the proposition we're is very spent bespoke the lot not Wolfcamp have are stick. B and zones. the We've while time of it's saying A it and A Wolfcamp a footprint, in going the we're contiguous mentioned across you being As here to like of weighted large

have deck our data some we our our are well but we lever and amount we a I increases incorporating test helped obviously type is There biased and our Jeff, one-off some parts it’s these here of have as very the to and some the obviously, in diligence is doing a is in an won't knowledge, curves. oil oil in co-development see put see which asset of seismic So regional that fair of the we onto something inform often we that did the it production, of don't were also to of A&D opportunity - place test. results But learnings. put two there said zones are packages very that that as strong, that very that mean Delaware great. lot in

just it really with that's, in a that So not but wells. them you since developed think about they've line even in down are we how working our our curves parent then it can off locations XX% parent rest of way it, appropriately,

Permian. the again something of So cycle point don't at see the in we this that's usually

Scott Hanold

and start And much, this understand sort development too to again so, the to Callon see conceptually do asset legacy you be a mix it's as maybe kind this forward. done? what ability to here? look you between also, you going use a do with a sort expertise couple stuff? then of early maintain How your be And that you I going the is into too forward already do plan three the question they've on say to four going acreage And I the XXXX, obviously delve wells the and on plan this enhance stuff when about guess, will what question mix and acreage? guys to to thinking forward legacy of this with of but is double But

Joe Gatto

start let our standpoint, to from broader of and maybe But development becomes about get me other talk development part with operation, Jeff designs Delaware folded there. going and topics in. completion philosophy let some Yes, a the It's synergy right. enhancing this look

look asset is we additive inventory this, as entire to across compete at our benefits an have We across is going is But capital, profile. that between crude moving for the footprint. this

based rates about. reinvestment share the get to definition, we've it's capital So going that of fair on its by talked

So into XX% about from broader we've rate. reinvestment corporate the go Delaware about talked is importantly to going going this to asset That's level benefit XX%, But base. what's integration.

cash So, remarks, on. program. the we're I XX through in broader into the of if Callon to will look they've profile. think morph cash I in appendix and of from incremental $XX ballpark at million if plus CapEx, EBITDA of prepared going that CapEx, it million you at been up that shows and our scenario the goes working on flow increase some a free pick type oil. And at by in implied $XXX X-rig operating somewhere $XXX XX% our you Follow in mentioned it's going up look But about the then things standalone asset. free flow sort Page this

So may he going we're I'll how about Jeff, bit to turn it better. a make this talk to little

Jeff Balmer

taking the individual very account trying into capacity been intelligent in stacking looking And it into as and the that modify a wells, well. existing hybrid and able wonderful teams Obviously to we've extremely fracs, best about take basis. Carrizo come and pad-by-pad of is these were and creativity takeaway operations we development fracs within propagate within the have, water an a individual water design an ideas Callon lowering you take play. amount whole. having that extremely what how the successful motivated at a we on can efficient well, And similarities thing regional infrastructure is take spacing to we're is and look at two But geology, you you there individual do and petro-physics, even practices and best and to similar to when programs, work and things some companies

been a with. that with we successful already and combining lot done what's learning anticipate been the we've that things So, from

net. So that a this I'm is good very confident

Operator

go Neal Please question Thank you. ahead. The next from of Truist. is Dingmann

Neal Dingmann

you sir, hear me. Yes

Joe Gatto

could question. got first you start Neal out the you out, at when Yes cut you cut your beginning, start you - if

Neal Dingmann

plan and rigs think the just order just wondering in the Sorry, two wondering, prior I rigs of to deal, I mentioned could flow even probably what Joe, going of obviously as at prior was there you're just deal And rigs? to X.X free the an the I us you once you'd you that's and kind thinking mean, you idea far give then kind forward on on when had kind as now I'm new. including X.X frac and will include plan, let combined cash of that nice the rig stop then activity? pretty of look me

Joe Gatto

X.X run we're rigs. Yes, would independent about calendar to going independent run

taking within the half has for Primexx So acreage. back some some now right two delineation of obligations care it, rigs of existing and the are that

short-term a of We So to and combination that. flow of the is the performance. free that strongly about plan feel cash end overall capital back from continue very year the

So that good of unchanged. the across really it a kind it's fit. Again board remains

So companies. of be a straightforward combination program just will linear our initial of relatively both

Neal Dingmann

the just it you then cash that And double, one, could guys the the but kind on even of given of based the up? on certainly is you. one I'm could you're your on kind forecast, or on XXX free sort just I Okay. and was running picking there last assumption, the the everybody the I'm the cash you that do deal that's that of you put Thank sort way on lock any of assume just I flow. that deal, with guess revolver wondering something appears up, and numbers, see does if flow Kimmeridge wondering production then

Kevin Haggard

Neal. this Kevin. Thanks, is Yes,

we revolver, potential that but quarters potential capital very some and markets right on feel through So a opportunities do is that put divestitures down combination look flow on and as be now of the assumption the for program. free XXX, pay in other to opportunistically as will of we maybe RBL on term able that well putting that the the out, coming our that comfortable to cash

Joe Gatto

have a In stand that terms similar a and where Callon to they Kimmeridge, lock-up today. lock-up. not receive selling have they Primexx of But the stock will you shareholders do

Operator

you. Thank

Derrick Next ahead. Please Stifel. with question go is Whitfield from

Derrick Whitfield

all congrats an accretive your to morning on update transaction. and Good

Joe Gatto

Thanks Derrick.

Derrick Whitfield

how together? acquisition Joe comment you came at this opportunity could for Perhaps level, a on high

Joe Gatto

establishing terms we're position type transaction they four that point, of in I of companies I guess growing were type on at and certainly benefits but three eye of lot are point an in our out made driven said, things or an Delaware, is time, back actually we didn't as that saw back concept as ago, I'll a opportunity how progressing years go as of that discussed similar with the of a this progress. equity a at in work some going an Jeff Yes, both sort Primexx kept

financial as in we've dialog at stock matter that with match relationship it's align in the did combined together, that been can saw great touch we overlay staying great is This think Callon this, the I that and So clear things several as been we for But put to them of back and over years been proposition as value types bring and relationships. for outcomes, in drive building come we've looking that will and to opportunities helpful a find easy well these continue to opportunities, and that have those and to obviously looked opportunity very about aren't of entity that and great a didn't things take sellers one assets diagram. together. that the

work many months to flavor but been you gives fruition. do it's this, this all So to of how hopefully came it

Derrick Whitfield

follow-up, wanted the focus midstream That's the great. on as my to then And side acquisition. of I

acquisition regard with and in speak the to So the to opportunity could see volumes? you third-party to price this Carrizo, on to assigned value you comment your increased

Joe Gatto

good there ponds, gas rigs, capacity, water assigned interest and component lift services as value is, is drilling working on to assigned, the pipelines, that. there footprint certainly goes XXX,XXX delivers what about there's of fresh wells address some this where certainly now Yes. this crews, that's to emissions, both we're and partners, frac talk some the our to revenues gas, pretty wells, about there is provides potentially water decent, field third-party versus build gathering savings water a of on that look value specifically supply maybe that's I and us a that there barrels the gas field also water really going so supply gas reduce is was can't frac diesel and there, good our there distribution

built ahead water and than of we've in right years, know way the water to on more the recycling the way been going This Delaware. that last business a that. we've As you game the is few over managing double on

opportunities today, look now, I a that on that is number So going going potential There you. proposition but give there to for can here but forward. not we're no only value is to build specific

Derrick Whitfield

and helpful Very on acquisition. great update

Joe Gatto

you. Thank

Operator

you. One. Please of And question comes Phillips Capital from go the Thank ahead. next Johnston

Phillips Johnston

It ask, Thanks Primexx congrats sounds just you're $XXX wanted wells is about asset little assuming or so and next the a year, exit? exit of many or two-rig from on gross maintenance as a that there of how that assumes all type me and program like CapEx, that is well. throughout bit million of for for program to a in sort of next growth year to

Joe Gatto

of on basis, these a growth little of of here. growth there'll of compound bit I at X% Yes, timeframe over from X-ish over growth a but 'XX obviously when further Phillips, in little a type XXXX bit modest. is it's type annual integrated optimize there the mean get frame growth, fairly a plan We about time that talked to be you looking the XXXX

in put we to around pin that. and some better, moving position out down might at about what provide really that out of budget. I wells I'm hopeful we're that's we little might in the think formal that there, terms can the bit and we until We mean but a that nets, growth don't great do In there, gross even feel change

So change. I might don't out marker that to a want there put

Phillips Johnston

flow, deal, you actively free some needle also additional like move will deals in think of digested accretion then, have cash and Yes, ratio this leverage okay. the be you this the guys on metrics? Joe, seeking And can you that other do provide some

Joe Gatto

the world be and characterized the necessarily look word, overlay can think by continue consolidation plans, squarely my it's situations make - where and to going opportunities to opinion, that get find we capital active that us or business, the us we plus say will just that I return that's our add path our operational being of that don't expertise synergies is wouldn't deliver to be to we thinking think financial passive. assets, a knowledge how part of them going deleveraging a continued I get similar those in deliver I day-to-day potentially about outcomes are can two at times, active in to shareholders. types results, in position below base, down to better, we further great further

I should to of doing day to that's world every do and just operator continue as we think an it's going everyone consolidate. a part what in what be

Operator

go Gabe [Operator question Next Please ahead. comes Instructions] from Cowen. Daoud,

Gabe Daoud

transactions of just how non-core bigger we on the two morning guys, whether that for on divestitures side, upstream now standpoint from moving going continued be base and divestiture stands touch up the Good maybe here. was pro forma would you're a helpful. any could does opportunities potential the mid-stream JV? - congrats standpoint around open mid-stream forward, I Just divestiture forward asset that it's on or hoping, mid-stream or obviously more sales thoughts Joe much

Joe Gatto

you with it we've little certainly Well, is closure going Sure. the guess bit market getting to we A&D speak to better, a as I pretty got to against. experienced a time few historically. some future. on that than things what bring better, take we're judge The we on front hope not-too-distant low as more know active processes that But bar

this, combined I to a that sure can this, my back new standpoint the asset digest. getting opportunities. focused allocation, to will our a screen we this take Right. put entire continue to group. in with interest what this else to maybe and the we through a capital year right and those year. some is is see radar think and put from mind, on for the making step priorities transaction we in but for we're from we on there with We're out catalyst say, type with year additional this had we're like the or first, go other it's going natural So assess footprint results what a invest assets mix and do goal In What's beyond next of footprint, if later could before back that there market, combined we've pruning there processes working be the that our opportunities additional take the

boost that to terms some the that those big some divestitures presence in pretty our be may of JVs a or it's alternatives in of Yes, of base. midstream side. midstream asset the or enhanced We're midstream On We've evaluating that. got is but path the forward and line about a too start there broader to this to about. to or on talked monetization still get just a is early finish for structure, maybe we've things thinking

Gabe Daoud

thanks press release, it, the you capital helpful. then shareholders. Got return Joe in that's the just had could a accelerate as acquisition mentioned follow-up to And

to where hit, is or you there about against And debt an is a need moving balance just you well? you out target want curious to those think curious that net that Just how as debt that target to two get absolute forward today. the sheet how play

Mark Brewer

to I the this some Right now, talk it will proposition. we with over clear turn Thanks parameters. financial of start I'll I Gabe, think and Kevin a value maybe about to have

debt. pockets near We it's of have a some phenomenal the - enterprise shareholders, value from down the in value debt-holders for paying putting proposition holder’s taking equity term that from

it's thinking this mandate type cash Kevin, think near terms and think that accelerates dramatically about, leverage that in in want, down are we've delivering you bit I I value how very So with we're had free this little the shareholder decisions? But we how okay, we and starts is flow our term. platform of and talk clear of maybe, a only on new about moving generation this substantial think

Kevin Haggard

levels, increasing on this this not this before sheet, we on less metric. about at would planning reducing burden. helps probably timetable forward leverage pro key say that debt on a that net of balance point. half prices, reach two times runway, that interest this which discussion debt goals takes fact The I focused the the targeted us think point takes press and so down overall our than I more almost much X.X of the those liquidity, net are Yes, still bring maturity is overall debt. like We're transaction is very than of this two forma of turns. the gate release less still times a that rest turn out the We reaching sentence, which by QX us giving ourselves There's the XXXX a down the part is by do more or elements. overall of end reducing about

we actually So this by leverage those accelerates dramatically improves can shareholder talk which profile the timetable our and about returns.

Operator

Partners. ahead. Thank David you. go Pickering next Heikkinen, is Please from And Energy question the

Joe Gatto

David?

David Heikkinen

done a Appreciate [technical difficulty] any of like margins that… definitely takes lot and time.

Joe Gatto

you out. missed the we David, Sorry your of question, first cut part

David Heikkinen

worries. No

have or are we getting less the should mergers development. Just Can better congratulating lot more of had public your should about assets as looks of take assets, at these talk work. development, expect we what as all been little on the wells a we done parent the what expect? full-field kind on you XX% a it data - sure in then are and XX% I'm than what have cum historically it’s you like you initial When pull we or full wells cum looking

Joe Gatto

out or of initial down of a Yes, to area, higher of distribution. a generally will some some a I'm you not you're there expect to to EUR you course to would be wells going those have that because Greenfield and tied parent early of modest hydrocarbons, Anytime you're over more time. not a percentage, from we going come handful be speaking, over degradation competing for wells see and

away it is, whole you are acreage, already geologic program returns existing some where And nice the to may if some they're to strong don't what's because very possibility with very strong geologically them the here zones not a you above thing Primexx ground. robust your of have a the lower that's off think them. in areas necessarily see sometimes you Callon's in will - capital case but instance that's and for not can so, statement. later, get - very, connected development the of going there The work we're back fair that again wells efficiency of that very, complexity be I springboard and where come very throughout to saying right there favor can acreage about I'm the

anticipate results So, across the board. strong I would

David Heikkinen

PDP like them mid 'XXs let reasonable and existing and we a if on base decline let are pulling And getting just then the a that take BOE decline? them we is basis

Joe Gatto

Yes change you wrong to be quite are go and I pseudo right. our it's is that you into what is and in But especially I place you state itself that that's to big think if proven take again steady on way. well It it surrounding programs wells if think of very the going we've enable going properly a that up That's - profitable. revealed you'll dropped that kind in we flow. put around in a

David Heikkinen

you. Thank helpful. that's Yes

Joe Gatto

Thanks, David.

Operator

is Please RBC next from follow-up go The question Hanold, ahead. you. Markets. Thank Capital Scott a

Scott Hanold

Yes, one bearing me thanks with for for more here.

when quick week pull improvements you as practices? obviously a question, best take Just and kind Callon some obviously and ago showed Now, that I report you your Primexx. your there step sustainability are the you're an story. back Is assets this - where you like do idea at How the with these and ESG base? to asset current does your of out Carizzo guys, a stark think pretty dramatic pretty, fit have getting relative look they into breath together, of

Jeff Balmer

existing importantly, opportunity is, do very there. recycling the [indiscernible] and Callon integrate assets as to. an outstanding. I the complementary a think water that look XX,XXX small mean, But relative barrels to of you relatively and philosophy where has discovery when out to operation at the course of and it is get that's have We capacity physically we Primexx I more

and Primexx relative incident or think to safety the of the ESG in board. across the an look Again, our fit it both the recordable I companies reduction and from growth anticipate it's of I has you cultural industry combined that a frankly acknowledgment rate, and that have would exemplary, practices in some at If of that continue. particular improve opportunities prevention emissions so and will to Callon that can and flaring

Mark Brewer

what on terms sort think line in GHG with know out is completely in I aligned flaring emissions that. volumes in you of Scott asset with our goals this of way, put And we've said in there other base

we right not look how acquisitions. did going asset As This criteria part is we we're is other This basis. only evaluate big Primexx, key but through a of diligence. a our at

overall, us us even position always isn't Jeff there's base. off work get and hopefully with So our going as do improvements goals talked Primexx any get about do own in to our of our a to this better. to But to knock asset

Scott Hanold

Got it, got it.

Okay.

hopefully continue overtime path So, dump least as better. at getting good and are

Mark Brewer

That's yes. statement, fair

Scott Hanold

Thank you.

Operator

Thank question-and-answer you concludes [Operator This session. Instructions] our

to like CEO Mr. President conference remarks. I'd turn Gatto, Now back Joe to and for closing over the

Joe Gatto

information progress, out questions, Thank and with joining, it’s thanks night, forward questions exciting acquisition you for an on operations obviously good last everyone if We've look a our Thanks to around few there, Callon. we of later good discussion, hoped for little and anymore. reach updating months in day that, than the put and you answer out had on here, again. a we the but we're to some lot just

Operator

for is today's The Thank attending conference now presentation. concluded. you

You may now disconnect.

Callon Petroleum (CPE) 4 Aug 212021 Q2 Earnings call transcript