Northland Securities analyst Jeff Grampp reiterated a Buy rating on Callon (CPE) today and set a price target of $11. The company’s shares opened today at $6.30, close to its 52-week low of $5.57.
Grampp commented:
“We reiterate our Outperform rating and $11 PT. Recall in early April, CPE announced the sale of its non-core the southern $260MM cash and up to $60MM in oil price dependent earnouts over the next three years that start at $60/BBL. The Ranger Area encompasses 9,850 net acres with a 66% working interest, 70 net drilling locations with a 25%+ IRR at April strip pricing and February 2019 production of 4,000 BOEPD (52% oil). We estimated it was completed at a solid acreage valuation multiple of ~$10,200/Acre, or $1.4MM per net drilling location when assuming $40,000/BOEPD for divested production and excluding earnout potential. Proceeds from the asset sale are targeted for debt/ leverage reduction.”
According to TipRanks.com, Grampp ‘s ranking currently consits of no stars on a 0-5 ranking scale, with an average return of -15.3% and a 20.7% success rate. Grampp covers the Basic Materials sector, focusing on stocks such as Penn Virginia Corporation, Sundance Energy Australia, and SilverBow Resources Inc.
Callon has an analyst consensus of Strong Buy, with a price target consensus of $11.43, which is an 81.4% upside from current levels. In a report released today, Williams Capital also reiterated a Buy rating on the stock with a $12 price target.
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Based on Callon’s latest earnings release for the quarter ending March 31, the company reported a quarterly GAAP net loss of $19.54 million. In comparison, last year the company had a net profit of $55.76 million.
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Callon Petroleum Co. engages in the exploration, development, acquisition, and production of oil and natural gas properties. It focuses on unconventional oil and natural gas reserves in the Permian Basin. The company was founded by Sim C. Callon and John S. Callon in 1950 and is headquartered in Houston, TX.
