KLR Group Raises Price Target on Callon Petroleum (CPE) Following Announced Acquisition

September 9, 2016 8:08 AM EDT
Get Alerts CPE Hot Sheet
Price: $17.13 +1.90%

Rating Summary:
    21 Buy, 6 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 21 | Down: 18 | New: 19
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KLR Group reiterated a Buy rating on Callon Petroleum (NYSE: CPE), and raised the price target to $21.00 (from $18.00), following the company's announced agreement to acquire ~5,667 and an overriding royalty interest in three 480 acre units offsetting the acreage net acres in Howard County for ~$327 million.

Analyst Gail Nicholson commented, "Callon announced it agreed to acquire ~5,667 net acres (75%+ offsetting current position in NW Howard County) and an overriding royalty interest in three 480 acre units offsetting the acreage (one unit operated by CPE) in Howard County for ~$327 million. Estimated current net production is ~2,300 Boepd (~86% oil). Assuming $40k per flowing Boe on production, the transaction equates to ~ $41.5k per acre or an incremental ~$2.1 million per drilling location. To fund the acquisition, CPE priced an upsized offering of 29.9 million shares (including overallotment), representing ~23% of shares outstanding, at ~$14.60 for total gross proceeds of ~$436.5 million. The transaction is expected to close on or before October 20, 2016."

For an analyst ratings summary and ratings history on Callon Petroleum click here. For more ratings news on Callon Petroleum click here.

Shares of Callon Petroleum closed at $15.54 yesterday.



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