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

The larger of the asset sales was the divestiture 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.

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

Callon Petroleum will continue to pursue initiatives that improve its financial position “and are encouraged by the expanding spectrum of actionable alternatives that have emerged,” President and CEO Joe Gatto said in a statement. (Source: Hart Energy; Shutterstock.com)

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.

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Emily Patsy

Emily Patsy is the senior managing editor for Hart Energy’s Digital News Group. She's responsible for the daily news flow and also manages the A&D Watch and Energy Pulse weekly newsletters.