Callon Petroleum Company (NYSE:CPE) Q2 2020 Earnings Conference Call - Final Transcript
Aug 05, 2020 • 09:00 am ET
Good day, and welcome to the Callon Petroleum Company Second Quarter 2020 Financial and Operating Results Conference Call. All participants will be in a listen-only mode. As a reminder, this call is being webcast and a replay of the call will be archived on the Company's site for approximately one year.
I would now like to turn the call over to Mark Brewer, Director of Investor Relations, for opening remarks. Please go ahead, sir.
Thank you, Cole. Good morning, everyone, and thank you for taking the time to join our conference call. With me this morning are Joe Gatto, our President and Chief Executive Officer; Dr. Jeff Balmer, our Chief Operating Officer; and Jim Ulm, our Chief Financial Officer. During our prepared remarks, we'll be referencing the earnings results presentation we posted yesterday afternoon to our website, so I encourage everyone to download the presentation if you haven't already. You can find the slides on our Events and Presentations page located within the Investors section of our website at www.callon.com.
Before we begin, I'd like to remind everyone to review our cautionary statements, disclaimers and important disclosures included on Slide 2 and 3 of today's presentation. We'll make some forward-looking statements during today's call that refer to estimates and plans. Actual results could differ materially due to the factors noted on these slides and in our periodic SEC filings.
We'll also refer to some non-GAAP financial measures today, which we believe help to facilitate comparisons across periods with our peers. For any non-GAAP measures we reference, we provide a reconciliation to the nearest corresponding GAAP measure. You can find these reconciliations in the appendix to the presentation slides and in our earnings press release, both of which are available on our website. Following our prepared remarks, we'll open the call for Q&A.
With that, I'd like to turn the call over to Joe Gatto. Joe?
Joseph C. Gatto Jr.
Thanks, Mark. Our team posted impressive numbers for the second quarter, amidst a very challenging commodity environment and a rapid change in our daily work routines. Development and operating costs saw meaningful declines. Synergy realization was ahead of targets and ahead of schedule. And importantly, Callon was free cash flow positive setting the stage for future quarters of free cash flow for debt reduction. Our strong operational start to the year as a combined Company continued to show its impact in the second quarter, with an 8% sequential production gain to just under 109,000 BOE per day on operational capex of just $85 million. In addition, our lease operating expense dropped quarter-over-quarter despite having placed more than 60 new wells on production since the beginning of the year. With the proactive changes we've made to rightsize the combined organization, and reductions in compensation for our leadership team and Board of Directors, we reached an all-time low in cash G&A expense per BOE of $0.69 per BOE, and an all-in total cash G&A inclusive of capitalized costs of $1.37 per BOE for the second quarter.