Barclays Energy Conference

September 9, 2020

IMPORTANT DISCLOSURES

FORWARD LOOKING STATEMENTS

This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements regarding Callon Petroleum Company's ("Callon" or the "Company") wells anticipated to be drilled and placed on production; future levels of drilling activity and associated production and cash flow expectations; the Company's production guidance and capital expenditure forecast; estimated reserve quantities and the present value thereof; anticipated returns and financial position; and the implementation of the Company's business plans and strategy, as well as statements including the words "believe," "expect," "may," "will," "forecast," "outlook," "plans" and words of similar meaning. These statements reflect the Company's current views with respect to future events and financial performance based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. No assurances can be given, however, as of this date, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain factors. Any forward-looking statement speaks only as of the date of which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law. Some of the factors which could affect our future results and could cause results to differ materially from those expressed in our forward-looking statements include the volatility of oil, natural gas and natural gas liquids ("NGLs") prices or a prolonged period of low oil, natural gas or NGLs prices and the effects of actions by, or disputes among or between significant oil and natural gas producing countries, general economic conditions, including the availability of credit and access to existing lines of credit, the effects of excess supply of oil and natural gas resulting from reduced demand caused by the COVID-19 pandemic and the actions of certain oil and natural gas producing countries, our ability to drill and complete wells, operational, regulatory and environment risks, cost and availability of equipment and labor, our ability to finance our activities, the ultimate timing, outcome and results of integrating the operations of Carrizo Oil and Gas, Inc. ("Carrizo") and Callon and the ability of the combined company to realize anticipated synergies and other benefits in the timeframe expected or at all, and other risks more fully discussed in our filings with the Securities and Exchange Commission (the "SEC"), including our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q and subsequent Quarterly Reports on Form 10-Q, available on our website or the SEC's website at www.sec.gov.

SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES

This presentation includes non-GAAP measures, such as Adjusted EBITDA, Free Cash Flow, Adjusted Diluted WASO, Adjusted EPS, Adjusted Discretionary Cash Flow, Adjusted G&A, Adjusted Cash G&A, Full Cash G&A Costs, Adjusted Income, Net Cash G&A, Gross Cash G&A, and other measures identified as non-GAAP. Reconciliations are available in the Appendix. Non-GAAP measures are not alternatives for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP, which are included in our SEC filings.

Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDA as net income (loss) before interest expense, income tax expense (benefit), depreciation, depletion and amortization, (gains) losses on derivative instruments excluding net settled derivative instruments, non-cashstock-based compensation expense, merger and integration expense, loss on extinguishment of debt, and other operating expenses. Management believes Adjusted EBITDA is useful because it allows it to more effectively evaluate our operating performance and compare the results of our operations from period to period and against our peers without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our results will be unaffected by unusual or non-recurring items.

Free Cash Flow ("FCF") is a supplemental non-GAAP measure that is defined by the Company as Adjusted EBITDA less operational capital, capitalized interest, net interest expense and capitalized G&A, excluding capitalized expense related to share-based awards. We believe free cash flow is a comparable metric against other companies in the industry and is a widely accepted financial indicator of an oil and natural gas company's ability to generate cash for the use of internally funding their capital development program and to service or incur debt. Free cash flow is not a measure of a company's financial performance under GAAP and should not be considered as an alternative to net cash provided by operating activities, or as a measure of liquidity, or as an alternative to net income (loss).

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IMPORTANT DISCLOSURES - (CONTINUED)

SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (cont)

Adjusted Income available to common shareholders ("Adjusted Income") and Adjusted Income per fully diluted common share are supplemental non-GAAP measures that Callon believes are useful to investors because they provide readers with a meaningful measure of our profitability before recording certain items whose timing or amount cannot be reasonably determined. These measures exclude the net of tax effects of certain non-recurring items and non-cash valuation adjustments, which are detailed in the reconciliation provided.

Adjusted diluted weighted average common shares outstanding ("Adjusted Diluted WASO") is a non-GAAP financial measure which includes the effect of potentially dilutive instruments that, under certain circumstances described below, are excluded from diluted weighted average common shares outstanding ("Diluted WASO"), the most directly comparable GAAP financial measure. When a loss available to common shareholders exists, all potentially dilutive instruments are anti-dilutive to the loss available to common shareholders per common share and therefore excluded from the computation of Diluted WASO. The effect of potentially dilutive instruments are included in the computation of Adjusted Diluted WASO for purposes of computing Adjusted Income per fully diluted common share.

Adjusted Discretionary Cash Flow is a supplemental non-GAAP measure that Callon believes is a comparable metric against other companies in the industry and is a widely accepted financial indicator of an oil and natural gas company's ability to generate cash for the use of internally funding their capital development program and to service or incur debt. Adjusted Discretionary Cash Flow is defined by Callon as net cash provided by operating activities before changes in working capital, merger and integration expenses, and payments to settle asset retirement obligations and vested liability share-based awards. Callon has included this information because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements, which the Company may not control and the cash flow effect may not be reflected the period in which the operating activities occurred. Adjusted Discretionary Cash Flow is not a measure of a company's financial performance under GAAP and should not be considered as an alternative to net cash provided by operating activities (as defined under GAAP), or as a measure of liquidity, or as an alternative to net income.

Adjusted general and administrative expense ("Adjusted G&A") is a supplemental non-GAAP financial measure that excludes non-cash valuation adjustments related to incentive compensation plans. Callon believes that the non-GAAP measure of Adjusted G&A is useful to investors because it provides readers with a meaningful measure of our recurring G&A expense and provides for greater comparability period-over-period. The table contained within this release details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A.

Full Cash G&A Costs is a supplemental non-GAAP financial measure that Callon defines as Adjusted G&A - cash component plus capitalized G&A excluding capitalized expense related to share-based awards. Callon believes that the non-GAAP measure of Full Cash G&A Costs is useful because it provides users with a meaningful measure of our total recurring cash G&A costs, whether expensed or capitalized, and provides for greater comparability on a period-over-period basis. See the reconciliation provided above for further details.

Net cash general and administrative expense ("Net Cash G&A") is a non-GAAP measure. Net Cash G&A is defined by the Company as general and administrative expense, net excluding the impact of non-cashstock-based compensation expense. Gross cash general and administrative expense ("Gross Cash G&A") is a non-GAAP measure. Gross Cash G&A is defined by the Company as Net Cash G&A excluding the impact capitalization and other allowable billings to working interest partners.

Callon has not reconciled its expectations as to Adjusted EBITDA or Free Cash Flow to their most directly comparable GAAP measures. Such a reconciliation is not available without unreasonable effort due to the unavailability of reliable estimates for certain components of the respective reconciliations and the inherent difficulty in making accurate forecasts and projections. As these items may vary greatly between periods, Callon is unable to address the probable significance of the unavailable information, which could significantly affect its future financial results.

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EXECUTION PROVIDES SOLID FOUNDATION

  • Realized synergies and benefits of scaled model driving results in a challenging environment
  • Solid execution and well performance in 1Q provides resiliency for balance of 2020
  • Cost structure reductions and reduced activity levels contribute to FCF that is forecasted to increase in 2H20 and into 2021
  • Improving liquidity into year-end with expected reductions in credit facility borrowings as activity levels normalize at lower levels

Financial Metrics1,2

2Q20

Adjusted EBITDA ($ in millions)

$153.4

Adjusted Discretionary Cash Flow ($ in millions)

$142.7

Adjusted income ($ per share)

$0.01

Operating + Full Cash G&A Costs2 ($ per Boe)

$9.58

Shares Outstanding at June 30, 2020 (millions)

397.4

Production: 108.7 Mboe/d (65% oil)

  • Sequential increase of 8% from 1Q20 (oil up 9%)
  • Exceeded target of 105 Mboe/d

Operational Capital (Accrual): $85MM

  • Below targeted threshold of $100MM
  • Cash basis impacted by accrued 1Q spending

LOE: $5.14 / Boe

  • 10% decrease from 1Q20
  • Increasing impact of best practices across asset base

Adjusted Cash G&A: $0.69 / Boe

  • Absolute expense of $6.8MM vs. $11.1MM in 1Q20
  • Full cash G&A costs1 of $1.37 / Boe

Free Cash Flow3 (Accrual): $18MM

  • Significant inflection to FCF positive position
  • Incremental positive FCF generation expected ~$70 MM in 2H20 @ $40/Bbl (WTI)

1.

Adjusted EBITDA, Adjusted EPS, Adjusted Discretionary Cash Flow, and Full Cash G&A Costs are non-GAAP measures. Please see the appendix for reconciliations to the nearest GAAP measures

2. .Operating + full cash G&A costs include: LOE, GP&T, Production & Ad Valorem Tax, Cash G&A Expense, and Capitalized cash G&A costs.

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3.

Callon defines Free Cash Flow as adjusted EBITDA minus operational capital minus capitalized interest and capitalized G&A minus interest expense.

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Callon Petroleum Company published this content on 09 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 September 2020 10:04:02 UTC