Intrinsic value of Callon Petroleum - CPE

Previous Close

$11.75

  Intrinsic Value

$2.04

stock screener

  Rating & Target

str. sell

-83%

Previous close

$11.75

 
Intrinsic value

$2.04

 
Up/down potential

-83%

 
Rating

str. sell

We calculate the intrinsic value of CPE stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  586
  906
  1,355
  1,966
  2,773
  3,813
  5,118
  6,720
  8,647
  10,922
  13,563
  16,582
  19,987
  23,780
  27,961
  32,525
  37,467
  42,776
  48,447
  54,468
  60,834
  67,537
  74,571
  81,935
  89,626
  97,647
  105,999
  114,689
  123,725
  133,116
Variable operating expenses, $m
  726
  1,122
  1,677
  2,434
  3,433
  4,720
  6,336
  8,319
  10,705
  13,521
  16,791
  20,528
  24,743
  29,440
  34,616
  40,266
  46,384
  52,957
  59,977
  67,432
  75,312
  83,610
  92,319
  101,436
  110,957
  120,886
  131,227
  141,985
  153,171
  164,798
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  726
  1,122
  1,677
  2,434
  3,433
  4,720
  6,336
  8,319
  10,705
  13,521
  16,791
  20,528
  24,743
  29,440
  34,616
  40,266
  46,384
  52,957
  59,977
  67,432
  75,312
  83,610
  92,319
  101,436
  110,957
  120,886
  131,227
  141,985
  153,171
  164,798
Operating income, $m
  -140
  -216
  -322
  -468
  -660
  -907
  -1,218
  -1,599
  -2,058
  -2,599
  -3,228
  -3,946
  -4,757
  -5,660
  -6,655
  -7,741
  -8,917
  -10,181
  -11,530
  -12,963
  -14,478
  -16,074
  -17,748
  -19,501
  -21,331
  -23,240
  -25,228
  -27,296
  -29,446
  -31,682
EBITDA, $m
  50
  77
  116
  168
  237
  325
  437
  573
  738
  932
  1,157
  1,414
  1,705
  2,028
  2,385
  2,774
  3,196
  3,649
  4,132
  4,646
  5,189
  5,760
  6,361
  6,989
  7,645
  8,329
  9,041
  9,782
  10,553
  11,354
Interest expense (income), $m
  0
  33
  61
  100
  156
  231
  331
  459
  620
  818
  1,056
  1,337
  1,663
  2,036
  2,456
  2,925
  3,441
  4,005
  4,615
  5,271
  5,971
  6,714
  7,500
  8,328
  9,197
  10,106
  11,056
  12,046
  13,078
  14,151
  15,266
Earnings before tax, $m
  -173
  -276
  -423
  -623
  -891
  -1,238
  -1,677
  -2,220
  -2,876
  -3,656
  -4,565
  -5,610
  -6,793
  -8,116
  -9,579
  -11,182
  -12,922
  -14,796
  -16,801
  -18,934
  -21,193
  -23,574
  -26,076
  -28,697
  -31,437
  -34,296
  -37,274
  -40,374
  -43,597
  -46,948
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -173
  -276
  -423
  -623
  -891
  -1,238
  -1,677
  -2,220
  -2,876
  -3,656
  -4,565
  -5,610
  -6,793
  -8,116
  -9,579
  -11,182
  -12,922
  -14,796
  -16,801
  -18,934
  -21,193
  -23,574
  -26,076
  -28,697
  -31,437
  -34,296
  -37,274
  -40,374
  -43,597
  -46,948

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  4,311
  6,661
  9,962
  14,454
  20,393
  28,035
  37,631
  49,412
  63,582
  80,309
  99,726
  121,924
  146,960
  174,853
  205,596
  239,157
  275,489
  314,533
  356,225
  400,503
  447,308
  496,593
  548,319
  602,463
  659,018
  717,989
  779,403
  843,301
  909,739
  978,794
Adjusted assets (=assets-cash), $m
  4,311
  6,661
  9,962
  14,454
  20,393
  28,035
  37,631
  49,412
  63,582
  80,309
  99,726
  121,924
  146,960
  174,853
  205,596
  239,157
  275,489
  314,533
  356,225
  400,503
  447,308
  496,593
  548,319
  602,463
  659,018
  717,989
  779,403
  843,301
  909,739
  978,794
Revenue / Adjusted assets
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
  0.136
Average production assets, $m
  3,223
  4,979
  7,446
  10,804
  15,243
  20,955
  28,128
  36,934
  47,525
  60,027
  74,541
  91,133
  109,846
  130,695
  153,674
  178,760
  205,916
  235,100
  266,262
  299,358
  334,343
  371,181
  409,844
  450,315
  492,587
  536,665
  582,570
  630,330
  679,990
  731,605
Working capital, $m
  -142
  -220
  -329
  -478
  -674
  -927
  -1,244
  -1,633
  -2,101
  -2,654
  -3,296
  -4,029
  -4,857
  -5,779
  -6,795
  -7,904
  -9,104
  -10,395
  -11,773
  -13,236
  -14,783
  -16,411
  -18,121
  -19,910
  -21,779
  -23,728
  -25,758
  -27,869
  -30,065
  -32,347
Total debt, $m
  1,124
  1,855
  2,881
  4,278
  6,125
  8,502
  11,486
  15,150
  19,557
  24,759
  30,798
  37,701
  45,487
  54,162
  63,723
  74,161
  85,460
  97,603
  110,569
  124,339
  138,896
  154,223
  170,310
  187,149
  204,737
  223,078
  242,177
  262,049
  282,712
  304,188
Total liabilities, $m
  1,341
  2,072
  3,098
  4,495
  6,342
  8,719
  11,703
  15,367
  19,774
  24,976
  31,015
  37,918
  45,704
  54,379
  63,940
  74,378
  85,677
  97,820
  110,786
  124,556
  139,113
  154,440
  170,527
  187,366
  204,954
  223,295
  242,394
  262,266
  282,929
  304,405
Total equity, $m
  2,971
  4,590
  6,864
  9,959
  14,051
  19,316
  25,928
  34,045
  43,808
  55,333
  68,711
  84,006
  101,255
  120,474
  141,656
  164,779
  189,812
  216,713
  245,439
  275,946
  308,195
  342,152
  377,792
  415,097
  454,063
  494,695
  537,009
  581,034
  626,810
  674,389
Total liabilities and equity, $m
  4,312
  6,662
  9,962
  14,454
  20,393
  28,035
  37,631
  49,412
  63,582
  80,309
  99,726
  121,924
  146,959
  174,853
  205,596
  239,157
  275,489
  314,533
  356,225
  400,502
  447,308
  496,592
  548,319
  602,463
  659,017
  717,990
  779,403
  843,300
  909,739
  978,794
Debt-to-equity ratio
  0.380
  0.400
  0.420
  0.430
  0.440
  0.440
  0.440
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
Adjusted equity ratio
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689
  0.689

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -173
  -276
  -423
  -623
  -891
  -1,238
  -1,677
  -2,220
  -2,876
  -3,656
  -4,565
  -5,610
  -6,793
  -8,116
  -9,579
  -11,182
  -12,922
  -14,796
  -16,801
  -18,934
  -21,193
  -23,574
  -26,076
  -28,697
  -31,437
  -34,296
  -37,274
  -40,374
  -43,597
  -46,948
Depreciation, amort., depletion, $m
  190
  293
  438
  636
  897
  1,233
  1,655
  2,173
  2,796
  3,531
  4,385
  5,361
  6,462
  7,688
  9,040
  10,515
  12,113
  13,829
  15,662
  17,609
  19,667
  21,834
  24,108
  26,489
  28,976
  31,569
  34,269
  37,078
  39,999
  43,036
Funds from operations, $m
  17
  17
  15
  12
  6
  -6
  -23
  -47
  -81
  -124
  -180
  -249
  -331
  -428
  -540
  -667
  -809
  -966
  -1,138
  -1,325
  -1,526
  -1,740
  -1,968
  -2,208
  -2,461
  -2,727
  -3,005
  -3,295
  -3,598
  -3,912
Change in working capital, $m
  -53
  -78
  -109
  -148
  -196
  -253
  -317
  -389
  -468
  -553
  -642
  -734
  -827
  -922
  -1,016
  -1,109
  -1,201
  -1,290
  -1,378
  -1,463
  -1,547
  -1,629
  -1,709
  -1,789
  -1,869
  -1,949
  -2,030
  -2,112
  -2,196
  -2,282
Cash from operations, $m
  70
  94
  124
  161
  202
  247
  295
  342
  388
  428
  462
  485
  496
  494
  476
  442
  392
  324
  240
  138
  21
  -111
  -258
  -419
  -592
  -778
  -976
  -1,184
  -1,402
  -1,630
Maintenance CAPEX, $m
  -118
  -190
  -293
  -438
  -636
  -897
  -1,233
  -1,655
  -2,173
  -2,796
  -3,531
  -4,385
  -5,361
  -6,462
  -7,688
  -9,040
  -10,515
  -12,113
  -13,829
  -15,662
  -17,609
  -19,667
  -21,834
  -24,108
  -26,489
  -28,976
  -31,569
  -34,269
  -37,078
  -39,999
New CAPEX, $m
  -1,211
  -1,756
  -2,467
  -3,358
  -4,439
  -5,712
  -7,173
  -8,806
  -10,591
  -12,503
  -14,513
  -16,592
  -18,713
  -20,849
  -22,979
  -25,086
  -27,156
  -29,183
  -31,163
  -33,096
  -34,985
  -36,838
  -38,663
  -40,471
  -42,272
  -44,079
  -45,904
  -47,760
  -49,660
  -51,615
Cash from investing activities, $m
  -1,329
  -1,946
  -2,760
  -3,796
  -5,075
  -6,609
  -8,406
  -10,461
  -12,764
  -15,299
  -18,044
  -20,977
  -24,074
  -27,311
  -30,667
  -34,126
  -37,671
  -41,296
  -44,992
  -48,758
  -52,594
  -56,505
  -60,497
  -64,579
  -68,761
  -73,055
  -77,473
  -82,029
  -86,738
  -91,614
Free cash flow, $m
  -1,259
  -1,852
  -2,635
  -3,635
  -4,873
  -6,362
  -8,111
  -10,118
  -12,376
  -14,870
  -17,583
  -20,492
  -23,577
  -26,817
  -30,191
  -33,683
  -37,280
  -40,972
  -44,753
  -48,620
  -52,573
  -56,616
  -60,755
  -64,998
  -69,353
  -73,833
  -78,448
  -83,213
  -88,140
  -93,245
Issuance/(repayment) of debt, $m
  504
  731
  1,026
  1,397
  1,847
  2,377
  2,984
  3,664
  4,407
  5,202
  6,039
  6,904
  7,786
  8,675
  9,561
  10,438
  11,299
  12,143
  12,966
  13,770
  14,557
  15,328
  16,087
  16,839
  17,588
  18,340
  19,100
  19,872
  20,662
  21,476
Issuance/(repurchase) of shares, $m
  1,288
  1,895
  2,697
  3,719
  4,983
  6,504
  8,289
  10,337
  12,639
  15,181
  17,943
  20,904
  24,042
  27,334
  30,761
  34,306
  37,954
  41,697
  45,527
  49,441
  53,442
  57,531
  61,715
  66,003
  70,403
  74,927
  79,588
  84,399
  89,373
  94,527
Cash from financing (excl. dividends), $m  
  1,792
  2,626
  3,723
  5,116
  6,830
  8,881
  11,273
  14,001
  17,046
  20,383
  23,982
  27,808
  31,828
  36,009
  40,322
  44,744
  49,253
  53,840
  58,493
  63,211
  67,999
  72,859
  77,802
  82,842
  87,991
  93,267
  98,688
  104,271
  110,035
  116,003
Total cash flow (excl. dividends), $m
  532
  774
  1,088
  1,480
  1,957
  2,519
  3,163
  3,883
  4,670
  5,513
  6,399
  7,316
  8,251
  9,193
  10,132
  11,061
  11,974
  12,867
  13,740
  14,592
  15,425
  16,242
  17,047
  17,844
  18,638
  19,435
  20,240
  21,058
  21,896
  22,758
Retained Cash Flow (-), $m
  -1,288
  -1,895
  -2,697
  -3,719
  -4,983
  -6,504
  -8,289
  -10,337
  -12,639
  -15,181
  -17,943
  -20,904
  -24,042
  -27,334
  -30,761
  -34,306
  -37,954
  -41,697
  -45,527
  -49,441
  -53,442
  -57,531
  -61,715
  -66,003
  -70,403
  -74,927
  -79,588
  -84,399
  -89,373
  -94,527
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -756
  -1,121
  -1,609
  -2,238
  -3,026
  -3,985
  -5,126
  -6,454
  -7,969
  -9,668
  -11,544
  -13,589
  -15,791
  -18,142
  -20,630
  -23,245
  -25,981
  -28,829
  -31,787
  -34,849
  -38,017
  -41,289
  -44,669
  -48,159
  -51,765
  -55,493
  -59,349
  -63,341
  -67,478
  -71,769
Discount rate, %
  4.80
  5.04
  5.29
  5.56
  5.83
  6.13
  6.43
  6.75
  7.09
  7.45
  7.82
  8.21
  8.62
  9.05
  9.50
  9.98
  10.48
  11.00
  11.55
  12.13
  12.74
  13.37
  14.04
  14.74
  15.48
  16.25
  17.07
  17.92
  18.82
  19.76
PV of cash for distribution, $m
  -721
  -1,016
  -1,378
  -1,803
  -2,279
  -2,789
  -3,314
  -3,826
  -4,301
  -4,714
  -5,043
  -5,272
  -5,390
  -5,393
  -5,285
  -5,074
  -4,775
  -4,405
  -3,983
  -3,530
  -3,067
  -2,610
  -2,176
  -1,775
  -1,417
  -1,106
  -843
  -627
  -455
  -321
Current shareholders' claim on cash, %
  67.5
  46.8
  33.2
  24.1
  17.9
  13.6
  10.5
  8.2
  6.5
  5.2
  4.3
  3.5
  3.0
  2.5
  2.1
  1.8
  1.6
  1.4
  1.2
  1.0
  0.9
  0.8
  0.7
  0.6
  0.6
  0.5
  0.5
  0.4
  0.4
  0.3

Callon Petroleum Company is an independent oil and natural gas company. The Company is engaged in the exploration, development, acquisition and production of oil and natural gas properties. The Company focuses on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin. The Permian Basin is located in West Texas and southeastern New Mexico and consisted of three primary sub-basins: the Midland Basin, the Delaware Basin, and the Central Basin Platform as of December 31, 2016. The Company's drilling activity focuses on the horizontal development of various prospective intervals in the Midland Basin, including multiple levels of the Wolfcamp formation and the Lower Spraberry shale. It owns additional immaterial properties in Louisiana. As of December 31, 2016, the Company had owned leaseholds in 39,570 net acres in the Permian Basin, all of which was located in the Midland Basin.

FINANCIAL RATIOS  of  Callon Petroleum (CPE)

Valuation Ratios
P/E Ratio -25.7
Price to Sales 11.8
Price to Book 1.4
Price to Tangible Book
Price to Cash Flow 19.9
Price to Free Cash Flow -33.3
Growth Rates
Sales Growth Rate 45.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -16.3%
Cap. Spend. - 3 Yr. Gr. Rate 3.5%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 22.5%
Total Debt to Equity 22.5%
Interest Coverage 0
Management Effectiveness
Return On Assets -6%
Ret/ On Assets - 3 Yr. Avg. -9.7%
Return On Total Capital -6.5%
Ret/ On T. Cap. - 3 Yr. Avg. -10.9%
Return On Equity -8.8%
Return On Equity - 3 Yr. Avg. -19.4%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 75.1%
Gross Margin - 3 Yr. Avg. 76%
EBITDA Margin -9.5%
EBITDA Margin - 3 Yr. Avg. -8.9%
Operating Margin -29.9%
Oper. Margin - 3 Yr. Avg. -51.9%
Pre-Tax Margin -45.8%
Pre-Tax Margin - 3 Yr. Avg. -50.7%
Net Profit Margin -45.8%
Net Profit Margin - 3 Yr. Avg. -64.9%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 6.3%
Payout Ratio -7.6%

CPE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CPE stock intrinsic value calculation we used $366.474 million for the last fiscal year's total revenue generated by Callon Petroleum. The default revenue input number comes from 0001 income statement of Callon Petroleum. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CPE stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.8%, whose default value for CPE is calculated based on our internal credit rating of Callon Petroleum, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Callon Petroleum.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CPE stock the variable cost ratio is equal to 123.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CPE stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Callon Petroleum.

Corporate tax rate of 27% is the nominal tax rate for Callon Petroleum. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CPE stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CPE are equal to 549.6%.

Life of production assets of 17 years is the average useful life of capital assets used in Callon Petroleum operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CPE is equal to -24.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1855.966 million for Callon Petroleum - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 227.568 million for Callon Petroleum is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Callon Petroleum at the current share price and the inputted number of shares is $2.7 billion.

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COMPANY NEWS

▶ Steven Cohen Dives Deeper Into Extraction Oil & Gas   [Sep-05-18 01:54PM  GuruFocus.com]
▶ Callon Petroleum Declares Series A Preferred Dividend   [Sep-04-18 05:07PM  PR Newswire]
▶ Callon: 2Q Earnings Snapshot   [04:34PM  Associated Press]
▶ Oil Surge Is Creating High-Yield Opportunities   [Jun-28-18 12:36PM  TheStreet.com]
▶ Callon Petroleum Declares Series A Preferred Dividend   [Jun-05-18 07:30AM  PR Newswire]
▶ Callon Petroleum Likely to Move Higher   [May-18-18 03:14PM  TheStreet.com]
▶ Callon: 1Q Earnings Snapshot   [May-02-18 05:43PM  Associated Press]
▶ 3 Energy Stocks to Buy for an Oil Breakout   [Apr-23-18 01:49PM  Kiplinger]
▶ Callon Petroleum Declares Series A Preferred Dividend   [Mar-05-18 06:00AM  PR Newswire]
▶ Callon Petroleum Company to Host Earnings Call   [Feb-28-18 07:15AM  ACCESSWIRE]
▶ Callon meets 4Q profit forecasts   [Feb-27-18 05:39PM  Associated Press]
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▶ US Dollar Hit a 3-Year Low: Good News for Crude Oil?   [Jan-17-18 08:27AM  Market Realist]
▶ Which Oil-Weighted Stocks Are Outdoing Oils Gains?   [Jan-11-18 12:01PM  Market Realist]
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▶ These 5 Energy Stocks Could Be Huge Winners in 2018   [Dec-20-17 07:34PM  Motley Fool]
▶ December Top Growth Stocks   [Dec-14-17 11:02AM  Simply Wall St.]
▶ Have Oil-Weighted Stocks Missed Oils Rise?   [Nov-28-17 01:01PM  Market Realist]
▶ Your Upstream Losers This Week: EXXI, REN, EPE, CPE, and UNT   [Nov-15-17 02:40PM  Market Realist]
▶ CALLON PETROLEUM CO to Host Earnings Call   [Nov-07-17 07:20AM  ACCESSWIRE]
▶ Callon misses 3Q profit forecasts   [Nov-06-17 04:35PM  Associated Press]
▶ These 16 Stocks Look Ready to Reverse   [02:30PM  TheStreet.com]
▶ Top Growth Stocks To Buy   [11:02AM  Simply Wall St.]
▶ Upstream Gainers This Week: Jones Energy Leads the Pack   [Sep-21-17 12:24PM  Market Realist]

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