Global Hunter Securities Reiterates Buy Rating On Callon Petroleum

According to Global Hunter Securities, Callon Petroleum (NYSE: CPE) now has sufficient access to services to develop its assets, and potentially attract new partners.

Global Hunter Securities said that the previously announced completion service agreement with Halliburton (HAL) is yielding three completions per month in the company's Wolfberry play. “Reiterating our Buy rating and adjusting our 12-month price target down to $11.00 from $11.75 per share. To reflect the impact of severe winter weather on production in February, we are lowering our 1Q11 production estimate from 5,101 Boepd to 4,791 Boepd, modestly reducing full-year estimates from 5,147 Boepd to 5,114 Boed, an 11% increase over 2010, and coupled with the impact of the 1Q11 equity offering, we are modestly reducing our estimates for the remainder of 2011. We are also initiating 2012 estimates for production growth of 31%, to 6,677 Boepd, EPS of $0.65, CFPS of $2.45, and EBITDA of $113.6 MM. Our 12-month price target is predicated on 6.0x 1Q12 EBITDA (ttm) less projected net debt.”

Callon Petroleum closed yesterday at $6.56.