CPE - Callon Petroleum - is it dead in the water or poised for a rebound?

Never knew they still existed. Used to do a bunch of work with them in the Black Bay/Main Pass area.

I remember Mr Fred. I used to deal with Joe Gamberi. That was in the late 90's.

Stock has been beaten down after the announcement of the CRZO deal. The deal isn't getting much public support. Paulson & Co. (holding ~10% of stock) came out with a letter over the past several days expressing concern over mixing in the EF properties and possibly using cash flow from those to fund Permian development. The transaction proxy has really good information about how CRZO went to several parties but couldn't settle on a favorable price for CRZO, almost makes you think CPE is suffering from winner's curse. If the CRZO deal doesn't close, I think CPE becomes a buyout candidate.

Good company. Will take awhile to digest Carrizo but I don’t see any reason to buy given the current state of energy sentiment. They also really aren’t differentiated versus their Permian-focused peers. If you’re betting on them, might as well bet on the entire Permian-focused midcap universe (SM, XEC, WPX, MTDR, JAG, CDEV, QEP, etc). I could see Callon getting taken out down the road but recall that takeout premiums have been pretty weak as of late.

Announced plans to propose a reverse split in order to cure NYSE non-compliance for 30 days under $1.

They're going bankrupt.

The equity is simply a long dated and extremely out of the money call on oil prices (or maybe very short dated if they file soon).