Investor Presentation SEPTEMBER 4, 2018 Important Disclosures - PowerPoint PPT Presentation

Investor Presentation SEPTEMBER 4, 2018

Important Disclosures Forward-Looking Statements This presentation contains projections and other 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. Words such as “estimate,” “project,” “will,” “may,” “anticipate,” “plan,” “intend,” “believe,” “expect,” “outlook,” “guidance,” “target,” “objective,” “forecast” or similar expressions that convey the prospective nature of events or outcomes generally indicate forward-looking statements. These projec tions and statements reflect the Company’s current views with respect to future events, investment plans and financial performance as of this date. No assurances can be given, however, 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. For a summary of events that may affect the accuracy of these projections and forward- looking statements, see “Risk Factors” in our Form 10 -K for the year ended December 31, 2017 filed with the Securities and Exchange Commission (the “SEC”) and other filings with the SEC. Unless legally required, Callon does not undertake any obligation to update forward looking statements as a result of new information, future events or otherwise SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES This presentation includes non-GAAP measures, such as Adjusted EBITDA, Adjusted Income, Adjusted Income per diluted share, Adjusted G&A and other measures identified as non- GAAP. Management also uses EBITDAX, which reflects EBITDA plus exploration and abandonments expense. 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 taxes, depreciation, depletion and amortization, exploration expense, (gains) losses on derivative instruments excluding net cash receipts (payments) on settled derivative instruments and premiums paid for put options that settled during the period, impairment of oil and natural gas properties, non-cash equity based compensation, asset retirement obligation accretion expense, other income, gains and losses from the sale of assets and other non-cash operating items. Adjusted EBITDA is not a measure of net income as determined by United States general ly accepted accounting principles (‘‘GAAP’’). 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 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 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 i n 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. We believe that the non- GAAP measure of Adjusted income available to common shareholders (“Adjusted Income”) and Adjusted Income per diluted share 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 below. Prior to being tax-effected and excluded, the amounts reflected in the determination of Adjusted income and Adjusted income per diluted share below were computed in accordance with GAAP. Adjusted general and administrative expense (“Adjusted G&A”) is a supplemental non -GAAP financial measure that excludes certain non-recurring expenses and non-cash valuation adjustments related to incentive compensation plans. We believe 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 Appendix table details all adjustments to G&A on a GAAP basis to arrive at Adjusted G&A. For a reconciliation of non-GAAP measures to their most directly comparable GAAP measure, please see schedules included in the Appendix.

Callon Petroleum 2Q18 RESULTS CURRENT RIG ACTIVITY 2Q18 production of 29.0 Mboe/d  Oil mix of 76%  YoY growth of 30% / sequential growth of 9% Operating margin of $44.17 per Boe (~85%) LOE per Boe $4.99 (1) Adjusted EBITDA of $102.6 MM RECENT HIGHLIGHTS  Closed acquisition of significant bolt-on acreage in Delaware Basin with meaningful near-term value contribution  Operational efficiencies driving higher FY’18 guidance for wells PoP while maintaining disciplined capital strategy  Evolving to larger scale development with first “mega - pad”  Spur D&C efficiencies continue to improve PORTFOLIO FOR OPERATED INVESTMENT  Over 1,500 operated locations in only currently producing zones (11.7mm lateral feet)  Total EUR of 1.4 Billion Boe (77% oil) based on current type curves  Avg. Spur lateral increased to ~8,200’ post transaction ~ 86,000+ PRO FORMA NET ACRES  Weighted average IRR of 40%+ (2) 1. LOE figures are calculated on a two-stream basis. 2. Assumes NYMEX benchmark prices of $60/Bbl and $2.75/MMBtu. 3

CPE Industry Leading Margins Continue to Improve MARGIN EXPANSION COST IMPROVEMENTS DRIVING OPERATING RETURNS Cash margin growth illustrates $60 35% operational efficiencies $50 Cash Costs/Revenue  Per unit cash operating costs (1) declined 10% 30% $40 sequentially $/Boe  Overall cash operating costs as a percent of $30 25% unhedged revenue declined to 20% in 2Q’18 $20 from 33% in 4Q’16 20% $10 Industry leading operating margins $0 15%  During 1H’18, CPE achieved the highest 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 Bloomberg standardized Adj. EBITDAX/Boe operating margin across publicly traded Unhedged Realized Price Cash Margin Cash Costs/Revenue E&Ps (2) CAPITAL EFFICIENT PRODUCTION GROWTH WITH SUPERIOR MARGINS (2)  2Q’18 Adj. EBITDA(X)/ Boe expanded to $38.95/Boe (3) , representing 17% margin CPE $40 CAGR over the last 2 years $35 1H'18 EBITDA(X) Adjusted/ Boe Future outlook $30  Strategic infrastructure investment preserves $25 margin strength $20  Ongoing water recycling and power supply initiatives, combined with increased scale, $15 expected to benefit improved capital efficiencies $10 $5 $0 -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% Historical 3 Year Production CAGR 1. Cash operating costs include Lease Operating Expenses, Production Taxes, and Cash G&A. 2. Based on standardized Bloomberg calculations for Adjusted EBITDA(X) for over 55 publicly traded E&Ps. 4 3. Based on CPE calculated Adjusted EBITDA(X).

Spur Bolt-On Acquisition  Bolsters position in oil rich, over-pressured core of Southern Delaware Basin  “Hand -in- glove” land position for extended laterals and increased working Unique Investment Opportunity interest  Leverage combined infrastructure  Purchase price underpinned by substantial PDP value Compelling  Established production base provides current returns and contributes to Corporate Value accretion in CF per DAS Proposition  Organic upside from emerging target zones  1Q18 production of 6,831 Boepd (73% oil) on 3-stream basis with a mature decline profile Near-Term  Currently completing an inherited DUC Contribution  Immediately incorporating D&C activities into a combined Spur operating program 5