Callon Petroleum Company (CPE)

Americans Drive More Than Pre-Covid Despite Record Gas Prices
Year to date in March, cumulative travel for 2022 rose by 5.6% to 753.7 billion vehicle miles of travel, and this is also slightly higher than the 753.1 billion vehicle miles in the first quarter of 2019. The past 12 months of travel data also shows higher mileage than the 12-month period that ended in March 2019.

GasBuddy released its annual summer travel survey on Thursday, suggesting that the percentage of Americans planning on road trips this summer has increased over last year, indicating that crude oil demand destruction—at least from the transportation sector—isn’t on the horizon even at today’s high gasoline prices.

CDEV merging with Colgate shows the real value of Callon Petroleum !!!!
CDEV plus Colgate deal is valued at $7 Billion: The combined company will have a total production of about 135,000 barrels of oil equivalent per day (boepd) and a $2.225B debt
Callon Petroleum will have 103,000 BOEPD (64% oil) in average production during 2022 and a $2.6B debt
And it's valued by the market at less than $3 Billion !!!

Why is Warren Buffett so interested in oil companies ? What does he see, that we are missing ?

Warren Buffett’s Berkshire Hathaway bought additional shares in Occidental Petroleum Corporation (NYSE: OXY) this week, bringing its stake to 15.3% in a move that could be seen as Buffett aiming for 20% of Oxy or bidding to buy the oil firm.

CPE is way undervalued here. CPE should be trade at par or higher than OXY

Today's EIA report was incredibly bullish for oil. Overall oil drawdown of 8.4 million barrels in the latest reported week. SPR drawdown was a massive 5.0 million barrels (by far the biggest this year), yet even with that the commercial (non SPR) inventories went down a net 3.4 million barrels.

SPR is now down 14.6% from one year ago.
Commercial (non SPR) is down 13.4% from one year ago.
Total US oil inventory (all of the above) is down 14.1% from one year ago.

$LPI $ESTE $CDEV $SM $FANG $PXD $CPE

How are others feeling on here, are we still bullish on oil generally?

Unless we head into recession then personally I struggle to see how these midcap oil companies aren't destined to make some mega earnings.

Driving season kicks off the end of the month, china is looking likely to re-open start of June, air travel is likely to pick up as more and more economies re-open fully and restrictions on travel get eased. These are all green lights for oil producers. CPE worries me with the request to increase the authorised share capital and the risk that management may go off on another massively costly and time consuming acquisition, like carrizo, which may just be a distraction to tidying up their own balance sheet and focusing on shareholder returns.

EIA
Actual -3.394M
Forecast 1.383M
Previous 8.487M

$cpe $sm