Callon Petroleum to reduce outstanding loan by nearly one-third

By Taylor Fox

New York, Oct. 1 – Callon Petroleum Co. plans to reduce borrowings under its credit facility to $1 billion, a reduction of nearly one-third, using proceeds from its overriding royalty interest sale and the issuance of notes, according to a news release.

Callon said it entered into an overriding royalty interest transaction with a private investment vehicle managed by Kimmeridge Energy, an energy-focused private equity firm, that generated gross cash proceeds of $140 million. Callon has also issued $300 million of second-lien secured notes to Kimmeridge.

The company noted that it also recently entered into a definitive agreement to sell substantially all of its non-operated assets for gross cash proceeds of $30 million.

Proceeds of the transactions with Kimmeridge are being used to reduce loan borrowings.

Callon also completed the fall borrowing base redetermination for its senior secured credit facility resulting in a reaffirmation of its borrowing base at $1.7 billion. The borrowing base and elected commitment were subsequently reduced to $1.6 billion in consideration of the ORRI sale and total second-lien notes capacity.

Callon is a Houston-based independent oil and natural gas company focused on the acquisition, exploration and development of assets in the oil plays of South and West Texas.

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