Callon Petroleum Co

15 Dec 2016material agreement● NeutralMajor

Callon priced an underwritten offering of 40,000,000 new common shares at $16.40 each (about $656 million gross), with underwriters holding a 30-day option for 6,000,000 more shares; closing was expected around December 19, 2016. Proceeds are meant to fund the pending Ameredev acquisition, with the balance for general corporate purposes. This is the equity funding announced alongside that deal, and it adds shares for existing holders (dilution). If the deal does not close, the filing says the money would go to drilling and general corporate purposes, which may include acquisitions, debt repayment and working capital.

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13 Dec 2016material agreement● NeutralMajor

Callon agreed to buy oil and gas properties and undeveloped acreage in the Delaware Basin from American Resource Development (Ameredev) for $615 million in cash, with a $46 million deposit. Closing is expected by February 13, 2017; either side can terminate if it has not closed by February 28, 2017. Callon would operate over 80% of the acreage with an estimated 82% average working interest. The press release says it plans to fund the price with a concurrently announced equity offering plus cash or its revolver. This is Callon's first move into the Delaware Basin; its prior acreage was in the Midland Basin.

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25 Oct 2016asset acquisition disposition▲ GoodMajor

Callon completed the Plymouth acquisition on October 20, 2016 for about $340 million in cash (subject to adjustments), up from the $327 million originally announced after additional sellers exercised tag-along rights. It adds about 6,904 gross (5,952 net) acres, mainly in Howard County, with an 82% average working interest, and lifts Callon's Midland Basin position to over 40,000 net acres. This resolves the September pending-deal thread; financial statements for the acquired business are to be filed by amendment.

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4 Oct 2016debt financing▲ GoodMajor

Callon closed the $400 million 6.125% senior notes due October 1, 2024 on October 3, 2016, raising about $391 million net; about $310 million went to repay the second lien term loan, with the rest for general purposes including a possible drilling increase. This completes the refinancing started in September, replacing the second lien loan (LIBOR+7.50%) with unsecured notes. Callon must also offer to exchange the notes for registered ones.

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16 Sept 2016debt financing● NeutralMajor

Callon priced a private placement of $400 million of 6.125% senior unsecured notes due 2024 at par, $50 million more than the $350 million announced days earlier, with closing expected October 3, 2016. Proceeds are to repay the second lien term loan and for general purposes, including a possible increase in drilling. This continues the refinancing set up by the September 9 credit facility amendment.

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12 Sept 2016debt financing● NeutralMajor

On September 9, 2016 Callon amended its $500 million revolving credit facility so it can issue senior unsecured debt (if leverage is no more than 2.50x), and it must use the proceeds to fully repay the $300 million second lien term loan. The amendment also allows preferred stock to be repurchased or redeemed if liquidity is above $100 million and leverage is no more than 3.00x. On September 12 Callon announced plans for a $350 million private placement of senior unsecured notes due 2024, with proceeds to repay the second lien loan and for general purposes. The filing states a $500 million facility, whereas earlier context noted only a $250 million borrowing base from 2014.

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8 Sept 2016material agreement● NeutralMajor

Callon priced an underwritten offering of 26,000,000 new common shares at $14.60 each (about $379.6 million gross), with underwriters holding a 30-day option for 3,900,000 more shares; closing was expected around September 12, 2016. The press release says the money is meant to fund the pending Plymouth acquisition; if that deal does not close, it would go to drilling and general corporate purposes. This is the equity funding that the September 6 acquisition filing said was coming, and it adds shares for existing holders (dilution).

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6 Sept 2016material agreement● NeutralMajor

Callon agreed to buy more Midland Basin properties, mainly in Howard County, from Plymouth Petroleum for $327 million in cash, with a $32.7 million deposit; closing was expected on or before October 20, 2016. The press release says it plans to fund substantially all of it with a concurrent equity offering and the rest from its revolver. The filing also gives pro forma results for Big Star and states its total purchase price as $329.6 million, and reports a first operated Howard County well (Silver City A #1H) with a 30-day peak rate of 2,123 Boe/d.

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31 May 2016asset acquisition disposition▲ GoodMajor

Callon completed the Big Star acquisition on May 26, 2016 for about $220 million in cash and 9,333,333 shares, of which 2,333,333 shares are held in escrow for 12 months for possible indemnification claims. It was funded by the recent equity offering, revolver borrowings and cash; Callon now has about 131.1 million shares outstanding and about 34,000 net Midland Basin acres, including the Reagan County deal that closed earlier in May. The deal resolves the April thread, and the borrowings on the revolver are a use of the credit facility.

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