Boston, MA 08/11/2014 (wallstreetpr) – MLV & Co analyst Chad Mabry initiated a report on Callon Petroleum Company (NYSE:CPE). The analyst company reiterated the buy rating on the stock with a price target of $14.00. It is an attractive price target with return of almost 50%. The analysts stated that the third rig of Callon will boost the production growth in fiscal year 2015.
The highlights
MLV & Co stated that Callon earnings per share in second-quarter came at $0.14 which was below their expectations. However, it was in line with the street’s average estimate. The company reported a sequential increase of 21% in net daily production. It came at 5,280(“BOE/d” in the second-quarter. It comprised of 84% of oil volume. The adjusted EBITDA came at $27.8 million. The net income applicable for common shareholders came at $0.07 per diluted share. The adjusted income came at $0.14 per diluted share.
Callon Petroleum Company (NYSE:CPE) has signed an agreement for a rig that will be utilized in the expansion of horizontal development program. The new drilling rig will add up $9 million in the operating capital expenditure in 2014.
The view
The adjusted earnings per share excluded the unrealized loss on derivatives amounting to $2 million. It also excluded the unrealized charge on stock awards of $3 million and the gain on the redemption of debt amounting to $2 million. The small non-recurring G&A expenses are not a part of the adjusted earnings. MLV & Co stated that the CFPS of $0.55 didn’t meet the consensus estimate. It was even lower than the analyst estimate of $0.59.
The lower operating expenses were an encouraging factor. However, the positive point was offset by the G&A and interest expenses. The production came well above the estimates. MLV & Co is positive on Callon Petroleum Company (NYSE:CPE) and expects it to boost higher oil sales and volume growth in the coming years.
