ipaa oil & gas investment symposium april 21, 2004
TRANSCRIPT
IPAA OIL & GASINVESTMENTSYMPOSIUM
APRIL 21, 2004
Corporate Profile
● PROVED RESERVES 217 BCFE
● CURRENT PRODUCTION 70 MMCFE/D (50% OIL)
● 13.9 MILLION SHARES OUTSTANDING
● $160 MILLION MARKET CAP
● $410 MILLION TOTAL ENTERPRISE VALUE
Significant Changes 2004
● INCREASED PRODUCTION AND
CASH FLOW
● RESOLUTION OF DEBT MATURITIES
● CAPITAL BUDGET REFOCUSED ON
RESERVE ADDITIVE PROJECTS
LOUISIANA
Producing Properties
HABANERO34,000 BOE/D
SHELL OPERATED
MEDUSA31,400 BOE/D
MURPHY OPERATED
MOBILE 864 AREA 35 MMCF/D
CALLON OPERATED
Mobile Block 864 Area
Callon Leasehold
863863 864864
907907908908
952952 953953 955955
MobileBlock 864 Unit
● AVERAGED 25 MMCF/D NET DURING 2003 ● 72% OF 2003 GAS PRODUCTION
● CALLON OPERATED
● 83% AVG. W.I. IN 8 WELLS
Mobile Block 952 / 953
Callon Leasehold
863863 864864
907907908908
952952
953953 955955
MobileBlock 864 Unit
● 9/01 - DRILLED MOB 953 #2 DEVELOPMENT WELL ● 4/02 - ADDITIONAL COMPRESSION ADDED MOB 952 ONLINE
● 20 MMCF/D PRODUCTION INCREASE AREA-WIDE
Mobile Block 955
Callon Leasehold
863863 864864
907907908908
952952 953953 955955
MobileBlock 864 Unit
● 1/04 - DRILLED MOB 955 #3 DEVELOPMENT WELL ● 11 MMCF/D PRODUCTION INCREASE WITHOUT COMPRESSION
● ADDITIONAL COMPRESSION SCHEDULED 2ND Q 2004
Medusa Mississippi Canyon Blocks
538/582
● OPERATOR: MURPHY
● OWNERSHIP: 15%
● WATER DEPTH: 2,235’
● 1ST PRODUCTION 11/03
● FIELD RESERVES (MMBOE)
● 80 PROVED● 45 POTENTIAL● 125 TOTAL
Medusa Development ● 1ST WELL COMPLETED AND BROUGHT ONLINE 11/24/03 PRODUCING 7,700 BOE/D ● 2ND WELL COMPLETED AND BROUGHT ONLINE 1/11/04 PRODUCING 14,000 BOE/D
● 3RD WELL COMPLETED AND BROUGHT ONLINE 3/18/04 PRODUCING 9,700 BOE/D
● ADDITIONAL 3 WELLS SCHEDULED FOR COMPLETION BY MID-YEAR
2004 Medusa Well Ramp-up
0
5
10
15
20
25
30
35
40
45
50
Nov Dec Jan
Feb Mar Apr
May Ju
n Jul
Aug Sep Oct
Nov Dec
MB
OE
/D
A-1 A-2 A-3 A-6 A-4 A-5
Garden Banks Block 341
Habanero
● OPERATOR: SHELL
● OWNERSHIP: 11.25%
● WATER DEPTH: 2,000’
● 1ST PRODUCTION: 11/03
● FIELD RESERVES (MMBOE)
● PROVED 70● POTENTIAL 40● TOTAL 110
HABANERO IS PRODUCED THROUGH SHELL’S AUGER PLATFORM
Habanero Development ● 1ST WELL COMPLETED AND BROUGHT ONLINE 11/29/03 PRODUCING 27,000 BOE/D ● 2ND WELL COMPLETED AND BROUGHT ONLINE 1/11/04 PRODUCING 7,000 BOE/D
EXPLOITATIONAND
DEVELOPMENT
25% W.I.
15% W.I.15% W.I.
15% W.I.15% W.I.
15% W.I. 15% W.I.MC 493 MC 494
MC 538 MC 539
MC 581 MC 582
MC 624
20% W.I.MC 626 MC 627
20% W.I.
MC 53715% W.I.
MedusaDiscovery
Medusa NorthDiscovery
Medusa Development
Medusa WestProspect
Souvenir Prospect
Medusa Northwest Prospect
Five-Step LeadProspect
15% W.I.15% W.I.MC 492MC 491
Medusa North Discovery● OWNERSHIP: 15%
● WATER DEPTH: 1,840’
● OBJECTIVE DEPTH: 9,600’
● POTENTIAL: 3 - 5 MMBOE
● POTENTIAL SIDE TRACK
FOR TAKE POINTA
A’
MEDUSANORTH
DISCOVERYMEDUSA
DISCOVERY
Medusa North Discovery● OWNERSHIP: 15%
● WATER DEPTH: 1,840’
● OBJECTIVE DEPTH: 9,600’
● POTENTIAL: 3 - 5 MMBOE
● POTENTIAL SIDE TRACK
FOR TAKE POINTA
A’
MEDUSANORTH
DISCOVERYMEDUSA
DISCOVERY
MEDUSA NORTH WELL
Medusa Northwest Prospect● OWNERSHIP: 15% ● WATER DEPTH: 1,700’
● 20 MMCF/D PRODUCTION INCREASE AREA-WIDE
● OBJECTIVE DEPTH: 10,000’
● POTENTIAL: 4 – 6 MMBOE
● SUB-SEA TIE-IN SHARED FLOWLINES WITH MEDUSA NORTH
MEDUSANORTHWESTPROSPECT
MEDUSADISCOVERY
MEDUSANORTH
DISCOVERY
MEDUSA NORTH WELL
Medusa Northwest Prospect● OWNERSHIP: 15% ● WATER DEPTH: 1,700’
● 20 MMCF/D PRODUCTION INCREASE AREA-WIDE
● OBJECTIVE DEPTH: 10,000’
● POTENTIAL: 4 – 6 MMBOE
● SUB-SEA TIE-IN SHARED FLOWLINES WITH MEDUSA NORTH
MEDUSANORTHWESTPROSPECT
MEDUSADISCOVERY
MEDUSANORTH
DISCOVERY
Entrada Area Potential
10% W.I.
20% W.I. 20% W.I.
20% W.I.
ConocoMagnoliaDiscovery
20% W.I.
#1
#2
#2 ST1
20% W.I.
#3 ST1
#3
ENTRADADISCOVERYENTRADA #2
CIRRUSPROSPECT
CLEAN SWEEPPROSPECT
EXPLORATION
Area of Operations
Productive - Proved Reserves Undeveloped Leases
OUTER CONTINENTAL SHELFOUTER CONTINENTAL SHELF
DEEPWATER DEEPWATER
SHALLOW MIOCENE
SHALLOW MIOCENE
Active Shelf Prospects
1
10
100
1,000
5 7 9 11 13 15 17 19 21 23
DEPTH - THOUSANDS OF FEET
BC
FE
Conventional Shelf Prospects
CALLON PROSPECT ’04 – ‘05
Active Shelf Prospects
1
10
100
1,000
5 7 9 11 13 15 17 19 21 23
DEPTH - THOUSANDS OF FEET
BC
FE
CONVENTIONAL SHELF “BRIGHT SPOT” SUPPORTED
Fairfield 3-D Survey
Louisiana
HI 11922% W.I.
WC 295 20% W.I.
CALLON PROSPECT ’04 – ‘05
CURRENT AREA OF FOCUS OVER 6,000 WELLS 50 TCFE PRODUCED 6,000 SQ. MI. SEISMIC DATA APPLYING AVO TECHNOLOGY
Active Shelf Prospects
1
10
100
1,000
5 7 9 11 13 15 17 19 21 23
DEPTH - THOUSANDS OF FEET
BC
FE
CONVENTIONAL SHELF “BRIGHT SPOT” SUPPORTED
DEEP SHELF AVO SUPPORTED
Active Shelf Prospects
1
10
100
1,000
5 7 9 11 13 15 17 19 21 23
DEPTH - THOUSANDS OF FEET
BC
FE
CONVENTIONAL SHELF DEEP SHELF CURRENTLY DRILLING
FINANCE
Debt 9/30/03($MILLIONS)
2004 2005
MATURITY
DEBT:*
SR. BANK CREDIT $ 72 $ --
12% SR. UNSECURED NOTE -- 95
10.125% SR. SUB NOTES 23 --
10.25% SR. SUB NOTES 40 --
11.0% SR. SUB NOTES -- 33
9.75% SR. UNSECURED NOTES -- --
TOTAL DEBT $135 $128
TOTAL $263
*INCLUDES CURRENT PORTION
Debt 3/31/04($MILLIONS)
2004
2005M A T U R I T Y
2010
DEBT:*
SR. BANK CREDIT $ 17 $ -- $ --
12% SR. UNSECURED NOTES -- -- --
10.125% SR. SUB NOTES -- -- --
10.25% SR. SUB NOTES -- -- --
11.0% SR. SUB NOTES -- 33 --
9.75% SR. UNSECURED NOTES -- -- $ 200
TOTAL DEBT $ 17 $ 33 $ 200
TOTAL $250
*INCLUDES CURRENT PORTION
Actual / Estimated Production
0
20
40
60
80
MM
CF
E/D
OTHER SHELF MEDUSA HABANERO
8/03 9/03 10/03 11/03 12/03 1/04 2/04 3/04 4/04 5/04 6/04 7/04
2004 Hedging PositionCRUDE OIL
TOTAL POSITION 1.2 MMBO (AVG. 3,250 BO/D)
50% OF PROJECTED PRODUCTION
1,725 BO/D COLLARED @ $29.50 x $32.50
1,525 BO/D FIXED @ $30.75
NATURAL GAS
TOTAL POSITION 5.5 BCF (AVG. 15 MMCF/D)
47% OF PROJECTED PRODUCTION
COLLARED @ $5.00 MCF FLOOR
AVERAGE CEILING OF $6.20
2004 GuidanceESTIMATED PRODUCTION
OIL (MMBO) 2.2 2.5
GAS (BCF) 11.0 12.5
CASH EXPENSES ($MILLIONS)
OPERATING AND G & A $ 28.0 $ 31.0
INTEREST $ 20.5 $ 22.5
MARGIN ANALYSIS PER BBL PER MCF
REALIZED PRICES $ 28.16 $ 5.22
CASH EXPENSES 12.28 2.05
CASH MARGIN $ 15.88 $ 3.17
Capital Budget
YEAR 2004
$18 MMSHELF DEVELOPMENT
AND EXPLORATION
$29 MMDEEPWATER DEVELOPMENT
AND EXPLORATION
$18 MMLEASES, SEISMIC
AND OTHER
Reserve Additive Spending
0
10
20
30$MILLIONS
LEASES AND SEISMIC DRILLING AND DEVELOPMENT
2003 2004
$1 MM
$7 MM$5 MM
$27 MM
● STRONG PRICE REALIZATION CLIMATE
● SIGNIFICANT GROWTH IN PRODUCTION AND CASH FLOW
● IMPROVING BALANCE SHEET
● SIGNIFICANT POTENTIAL FROM SHELF AND DEEPWATER PROSPECT INVENTORY
Summary – Why Callon?
Forward-Looking Statements and Reserve Estimates
This presentation contains projections and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These projections and statements reflect the Company’s current views with respect to future events and financial performance as of this date.
No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors.
The Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as reserve estimates, that the SEC’s rules strictly prohibit us from including in filings with the SEC.