US Shale Producer Callon Petroleum Addresses Debt with $170 Million Asset Sales

Callon Petroleum Co. agreed to $170 million in asset sales on Oct. 1 the U.S. shale producer said will accelerate debt reduction. 

The sale includes the monetization of approximately 3.5% of Callon’s current daily production in both the Eagle Ford Shale and Permian Basin with a resulting average net revenue interest (8/8ths basis) of over 74% for both the company’s existing producing wells, as well as its undeveloped location inventory.

The larger of the two monetizations was the sale of an overriding royalty interest in substantially all Callon-operated oil and gas leaseholds to a private investment vehicle managed by private equity firm Kimmeridge Energy that generated gross cash proceeds of $140 million. Callon also issued $300 million of principal value second lien secured notes to Kimmeridge. Separately, Callon said it recently entered an agreement to sell substantially all of its nonoperated assets for gross cash proceeds of $30 million.