Natchez, MS (October 26, 2000) -- Callon Petroleum Company (NYSE: CPE/CPE.PrA) announced today that it has completed the sale of its $32 million Senior Subordinated Notes due 2005, which were priced to yield 11 percent. Callon has granted the underwriters, Morgan Keegan & Company, Inc. and A.G. Edwards & Sons, Inc., the right to purchase up to an additional $4.8 million aggregate principal amount of notes to cover over- allotments. Initially, $27.5 million of notes were offered, but the offering was later increased to $32 million.
After deducting the underwriters' discount and offering expenses, the net proceeds from the offering (approximately $30.6 million) will be used to purchase the company's outstanding 10% Senior Subordinated Notes due 2001 in conjunction with a tender offer. In addition, the company intends to redeem all of its 10% Senior Subordinated Notes due 2001 not tendered in the offer. Total cost to purchase and, if necessary, redeem the notes is $24.2 million, plus accrued interest and expenses. Remaining proceeds, together with Callon's cash flows and borrowings under its bank credit facility, will be used to fund the company's remaining 2000 capital expenditure budget. Pending the use of the net proceeds, the company will repay amounts under its bank credit facility, which may be re-borrowed at a later date.
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.
A written prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, may be obtained from the company at the following address: 200 North Canal Street, Natchez, MS 39120, Attn: Investor Relations. The notes were offered in connection with a distribution by Callon that represents a new financing.
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.
For further information contact: Terry Trovato P.O. Box 1287 Natchez, MS 39121 (601) 442-1601terryt@callon.com