Callon Petroleum sets Tuesday launch for $200 million synthetic revolver

By Sara Rosenberg

New York, March 15 - Callon Petroleum Co. has scheduled a conference call for Tuesday to launch its proposed $200 million seven-year synthetic revolving credit facility, according to a market source.

Merrill Lynch is the lead bank on the deal.

Price talk on the synthetic revolver is expected to emerge at the launch, the source added.

Proceeds will be used to help fund the acquisition of BP Exploration and Production Co.'s 80% working interest in the Entrada Field. Callon will pay an initial price of $150 million for Entrada and an additional $40 million after the field produces 12.5 million barrels of oil equivalent.

In connection with this new deal, Callon is amending its existing credit facility, increasing fees and interest rates, and lowering the borrowing base to $50 million from $75 million.

The transaction is expected to close on or before April 16.

Callon is a Natchez, Miss., explorer, developer, acquirer and operator of oil and gas properties.

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