Callon Petroleum strengthens balance sheet with $275 million loan

By Lisa Kerner

Charlotte, N.C., Sept. 23 – Callon Petroleum Co. chairman and chief executive officer Fred Callon said the company’s recent financing for its acquisition of acreage and oil and gas producing properties will “significantly improve” the company’s balance sheet.

In September, Callon announced a definitive agreement to acquire the acreage and properties in Texas from private entities.

“We recently raised $129 million in equity, and we are in the process of a $275 million debt offering,” Callon said during a presentation at the IPAA Oil & Gas Investment Symposium in San Francisco on Tuesday.

The over-allotment option was exercised in full for Callon’s 12.5 million share offer, said chief financial officer Joe Gatto.

The acquisition is expected to close in early October, after which Callon will have a $250 million borrowing base available to fund its drilling activities “over the next year or two,” according to the CEO.

Pro forma, the company’s ratio of debt to EBITDA will be 1.9 times, just shy of the company’s targeted range of two to 2.5 times, Gatto said.

Liquidity was $115 million at June 30 and is expected to be $258 million following the acquisition.

Callon is a Natchez, Miss.-based energy company focused on the acquisition, development, exploration and operation of oil and gas properties in the Permian Basin in West Texas.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.