Each one in plain English, with the numbers worked through for a shareholder.
20 Aug 2019business combination● NeutralMajor
Callon filed a preliminary registration statement (Form S-4) with the joint proxy statement/prospectus for the Carrizo merger, registering up to 202,916,505 Callon shares for issuance to Carrizo holders at 2.05 Callon shares per Carrizo share. The filing asks Callon holders to vote on the merger, the share issuance and the increase in authorised shares, and says that at $13.12 per Carrizo share (based on Callon's July 12, 2019 price) the offer was valued. Meeting dates are blank and the statement is not yet effective. This continues the July 14 merger agreement.
On July 14, 2019 Callon agreed to acquire Carrizo Oil & Gas in an all-stock merger: each Carrizo share converts into 2.05 Callon shares, and after closing Callon holders would own about 54% and Carrizo holders about 46% of the combined company. Callon shareholders face heavy dilution in share-count terms but will own the majority. Closing needs votes from both companies' shareholders, a Callon charter change to authorise more shares, antitrust clearance and other conditions, with an outside date of February 14, 2020 (extendable to April 14, 2020). Termination fees are $47.4 million payable by Carrizo and $57.0 million by Callon in specified cases; the current officers stay and the board adds three Carrizo directors.
13 June 2019asset acquisition disposition● NeutralMajor
On June 12, 2019 Callon completed the sale of non-core southern Midland Basin assets (the 'Ranger Asset Divestiture') to Sequitur Permian, LLC for $245 million net cash at closing, under an April 8, 2019 agreement. It could receive up to $60 million more depending on average West Texas Intermediate oil prices over three years. Callon also now lists a Houston address. This is a new disposal of Midland acreage built up in earlier years; the filing does not say how the cash will be used.
On September 27, 2018 Callon amended its $2 billion senior secured revolving credit facility, raising the borrowing base from $825 million to $1.1 billion and lenders' elected commitments from $650 million to $850 million, and updating various covenants. This continues the facility's stepwise increases from April 2018 and comes shortly after the Cimarex deal closed; the filing gives no link or reason (any link is inference).
On August 31, 2018 Callon completed the Delaware Basin purchase from Cimarex announced in May, paying $538.6 million in cash after customary price adjustments (the headline price was $570 million). The properties include about 28,000 net surface acres in the Spur area, over 90% held by production and mostly next to its existing acreage. This resolves the pending Cimarex deal; a press release also updated 2018 guidance (figures not in this filing), and acquired-business financials are due by later amendment.
Callon filed a registration statement (Form S-4) to swap the $400 million of 6.375% senior notes due 2026 it sold privately on June 7, 2018 for identical notes registered with the SEC. Callon receives no proceeds and the new notes have the same terms apart from dropping transfer restrictions and registration rights. This fulfils the registration commitment left open when the notes were issued, but the offer's expiry date is blank and it is not yet effective.
On June 7, 2018 Callon closed the $400 million 6.375% senior notes due July 1, 2026, with net proceeds of about $394 million and interest paid each January 1 and July 1 starting January 1, 2019. The notes are guaranteed by Callon Petroleum Operating Company and rank equally with the existing 6.125% notes due 2024. Proceeds go to part-fund the pending Cimarex acquisition, repay revolver debt and general purposes. Callon must register exchange notes with the SEC, aiming for effectiveness within 270 days. This completes the sale agreed on May 31.
On May 31, 2018 Callon agreed to sell $400 million of 6.375% senior unsecured notes due 2026 to J.P. Morgan and other initial purchasers, upsized by $100 million from the $300 million first announced. Proceeds are to partly fund the Cimarex purchase and repay borrowings under the revolving credit facility, with any remainder for general purposes. This is the debt part of the Cimarex financing.
On May 24, 2018 Callon priced a public offering of 22,000,000 new common shares at $11.80 each, about $259.6 million gross, with underwriters holding a 30-day option for 3,300,000 more shares. Proceeds are meant to partly fund the Cimarex acquisition; if it does not close, the money would go to development, a potential preferred stock redemption and general purposes. This is the equity part of the funding announced with the deal and means existing shareholders are diluted by the new shares.
On May 23, 2018 Callon agreed to buy producing oil and gas properties and undeveloped acreage in the Delaware Basin from Cimarex Energy for $570 million in cash, effective April 1, 2018, with a $28.5 million deposit paid. The press release says it adds about 28,657 net acres to the Spur area (over 90% held by production) and about 6,831 boe/d of current production (about 73% oil, seller-provided data). Closing is expected by September 10, 2018. Callon intends to fund it with an equity offering, cash on hand and/or long-term debt. This likely identifies the 'pending Delaware acquisitions' left open earlier, and extends the Spur position bought from Ameredev in 2017 (inference on the link).
On April 5, 2018, Callon amended its $2 billion bank revolving credit facility: maturity extended one year to May 25, 2023, borrowing base raised from $700 million to $825 million, and elected commitments raised from $500 million to $650 million. Interest margins fall by 50 to 75 basis points depending on leverage. This continues the facility's growth since the May 2017 agreement; the borrowing base had risen from $650 million to $700 million between those filings, which the text implies but does not describe. James P. Ulm II now signs as CFO.
Callon reported fourth quarter 2017 production of about 26.5 MBoe/d (79% oil), up 18% from the prior quarter, and set a 2018 capital budget of $500-540 million, about 40% Delaware and 60% Midland. It expects 2018 production of 29.5-32.0 MBoe/d, 30-40% growth, adding a fifth rig in the first quarter and a second dedicated Delaware rig. This builds on the Delaware (Ameredev) and Midland acquisitions of 2016-17; January weather curtailed production beyond normal downtime and is built into guidance.
Amendment No. 1 to the July 2017 notes exchange registration statement. The part shown contains only boilerplate (director and officer indemnification, undertakings, signatures) with no new financial or business information.
Callon filed a registration statement to swap the $200 million of 6.125% notes due 2024 sold in May 2017 for identical registered notes. This fulfils the registration promise made when those notes were sold. Callon receives no proceeds and the terms are identical apart from dropping transfer restrictions and registration rights. The filing says the original $400 million notes were already exchanged in May 2017, which closes that earlier thread.
Callon signed a new $2 billion amended credit agreement (dated May 25, 2017) for its bank revolving loan. The borrowing base rose 30% to $650 million (from $500 million) and the maturity moved out to March 25, 2022 per the 8-K (the press release says May 25, 2022). Callon elected a $500 million commitment and has no borrowings outstanding. It replaces the earlier arrangement (borrowing base $500M, commitments $385M) and gives more room to fund the Delaware Basin deals flagged in the May 2017 notes offering, though the filing does not link the two.
Callon agreed to sell an additional $200 million of its 6.125% senior unsecured notes due 2024 at 104.125% of face value, $50 million more than first announced. Closing was expected May 24, 2017. The company says it will use the net proceeds to fund certain pending Delaware Basin acquisitions and for general corporate purposes. These add to the $400 million issued in October 2016 under the same indenture, and Callon agreed to register an exchange for the new notes, with effectiveness targeted within 270 days of issuance. The filing mentions pending Delaware Basin acquisitions beyond the closed Ameredev deal but does not identify them.
Callon filed a registration statement (Form S-4) to let holders swap their unregistered $400 million 6.125% senior notes due 2024, issued October 3, 2016, for identical registered notes. Callon receives no proceeds from the swap, and the new notes carry no extra financial terms. This carries out the registration obligation set when the notes were issued and does not change Callon's debt or its share count.
15 Feb 2017asset acquisition disposition▲ GoodMajor
Callon completed the Ameredev acquisition on February 13, 2017 for about $633 million in cash (subject to post-closing adjustments), up from the $615 million announced in December. The price rose after about 590 extra net acres and Ameredev's midstream assets were included. It adds about 16,700 net acres in Ward and Pecos Counties, Texas, and the press release says Callon's Permian position now totals over 56,000 net acres. The company has named this its fourth core Permian area, "Spur", and plans to add a rig there by mid-2017. This resolves the December pending-deal thread; financial statements for the acquired business are to be filed by amendment.
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.
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.
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.
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.
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.
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.
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).
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.
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.
Callon priced an underwritten offering of 22,000,000 common shares at $8.50 each (about $187 million gross), with a 30-day option for 3,300,000 more, led by Credit Suisse. Proceeds are to fund the pending Big Star acquisition and the Reagan County AMI deal announced the same day; this is the fourth share sale in the context, priced above the March 2016 price of $6.50, and it dilutes existing holders (inference).
Callon agreed to buy oil and gas properties and undeveloped acreage in the Midland Basin from BSM Energy, Crux Energy and Zaniah Energy (the Big Star deal) for $220 million in cash plus 9,333,333 Callon shares, with a $16.5 million deposit. The deal was expected to close May 26, 2016, and would give Callon an estimated 81% average working interest. It also signed a separate $33 million net cash deal with TRP Midland to jointly buy about 4,745 net acres in western Reagan County (55% Callon) while selling TRP a 27.5% interest in Garrison Draw; this firms up the Reagan County acquisition previously seen only in a press release. Issuing the shares to the sellers will add to the share count (inference).
