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Equity Transactions
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12 Months Ended |
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Dec. 31, 2013
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| Equity [Abstract] | |
| Equity Transactions |
Equity Transactions
On May 30, 2013, the Company issued 78,947 of 10.0% Series A Cumulative Preferred Stock (the “Preferred Stock”) and received $70,035 net proceeds after deducting the underwriting commissions and offering expenses. The sale consisted of 1,579 shares of Preferred Stock, par value $0.01 per share, public offering price of $47.50 per share and liquidation preference of $50.00 per share in an underwritten public offering. The Preferred Stock ranks senior to the Company’s common stock with respect to the payment of dividends and distribution of assets upon liquidation or dissolution. The Preferred Stock has no stated maturity and is not subject to mandatory redemption or any sinking fund. The Preferred Stock will remain outstanding indefinitely unless repurchased by the Company or converted into Callon common stock in connection with certain changes in control as defined in the Preferred Stock prospectus.
Holders of the Preferred Stock are entitled to receive, when, as and if declared by our Board of Directors (the “Board”), out of funds legally available for the payment of dividends, cumulative cash dividends at a rate of 10.0% per annum of the $50.00 liquidation preference per share (equivalent to $5.00 per annum per share). Dividends are payable quarterly in arrears on the last day of each March, June, September and December when, as and if declared by our Board. The first dividend date for the Preferred Stock was June 30, 2013, and these dividends were paid on June 28, 2013 (as June 30 fell on a weekend) in the amount of $0.43 per share or $679 for the stub period beginning with the issuance on May 30, 2013 through the dividend date on June 30, 2013. For the subsequent quarters ended September 30 and December 31, 2013, the Board of Directors declared for each quarter a dividend of $1.25 per share, or a total of $1,974, on the Company’s Preferred Stock, resulting in total dividend expense recognized in 2013 of $4,627.
Beginning on May 30, 2018, the Company may, solely at its option, redeem the Preferred Stock in whole at any time, or in part from time to time, for cash at a redemption price of $50.00 per share, plus accrued and unpaid dividends (whether or not declared) to the redemption date. The Company may redeem the Preferred Stock following certain changes of control as defined in the Preferred Stock prospectus, in whole or in part, within 120 days after the date on which the change of control has occurred, for cash at $50.00 per share, plus accrued and unpaid dividends (whether or not declared) to the redemption date. If the Company elects not to exercise this option, the holders of the Preferred Stock have the option to convert each share of Preferred Stock into a predefined number of Company common shares, subject to certain adjustments.
As defined in a provision of the Preferred Stock prospectus, the common shares reserved for issuance vary based on the number of authorized common shares. Based on the Company’s 60,000 authorized shares at December 31, 2013, 16,800 shares were reserved for a potential conversion. Subsequent to December 31, 2013, via a majority shareholder vote, the number of authorized shares of common stock was increased from 60,000 to 110,000 with a corresponding increase in the number of common shares reserved for a potential conversion to a maximum of 42,200 shares. Based on the Company’s closing common stock price of $6.53 per share on December 31, 2013, the Company reserved 12,090 shares to satisfy the potential conversion.
Except as required by law, holders of the Preferred Stock will have no voting rights unless dividends fall into arrears for six or more quarterly periods (whether or not consecutive). In that event and until such dividends in arrears are paid in full, the holders will be entitled to elect two directors to the Board, which will increase in size by that same number of directors.
During February, 2011, the Company received $73,765 in net proceeds from the public offering of 10.1 million shares of its common stock, which included the issuance of 1.1 million shares pursuant to the underwriters’ over-allotment option. The Company used $35,062 of the proceeds to repurchase $31,000 principal amount of its Senior Notes, with the remaining proceeds intended for general corporate purposes including the planned development of the Company’s Permian basin and other onshore assets.
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