FOR IMMEDIATE RELEASE
Natchez, MS (April 3, 2002)--Callon Petroleum Company ( NYSE: CPE / CPE.PrA) today provided an update on the status of various financing transactions.
Extensions of maturity of Senior Subordinated Notes due 2002 - The company has agreed with the holder of $9.7 million of its $36 million 10.125% Senior Subordinated Notes due 9/15/02 to extend the maturity of such notes for up to two years. The company is in ongoing discussions for similar extensions with the holders of an additional $17.8 million of the notes.
Increase in availability under Senior Secured Credit Facility - As of December 31, 2001 the company had commitments for a $50 million reserve borrowing base under its $75 million Senior Secured Credit Facility. The company is currently discussing options with its bank syndicate, as well as potential additions to that syndicate, that would increase availability under this facility up to $75 million.
Sale of North Dauphin Island Pipeline - The company has accepted an offer of $7 million for its North Dauphin Island Pipeline. The pipeline currently generates approximately $1.1 million annually of gross revenues to the company. The company will also receive certain commitments as to future capacity and reduced tariffs for its production transported through this line. The purchase and sale agreement should be signed and the transaction closed during the next two to three weeks.
Sale of Enron hedging claims - The company has accepted an offer of $2.6 million for its claims against Enron for hedging transactions. Completion of the sale is subject to finalization of the purchase and sale agreement which should occur by the end of April.
As noted, certain of these transactions are subject to additional negotiations and documentation. The company believes that most if not all of these transactions or agreements will be completed within the next 30 days. When combined with estimated cash flow from operations and current availability under the Senior Secured Credit Facility, these transactions and agreements will provide funding in excess of the company's commitments during 2002 for its capital expenditures and redemption of any unextended Senior Subordinated Notes due 9/15/02.
Callon Petroleum Company has been engaged in the exploration, development, acquisition and operation of oil and gas properties in the Gulf Coast region since 1950.
This news release 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. These projections and statements reflect the company's current views with respect to future events and financial performance. 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.