Callon Petroleum Company (NYSE: CPE) today reported net income of $4.2 million, or $0.12 per diluted share, for the quarter ended March 31, 2011, and compares to net income of $3.9 million or $0.13 per diluted share for the same quarter in 2010.

Highlights of meaningful events thus far in 2011 include:
  • Completed a public equity offering of common stock which resulted in net proceeds to the company of $73.8 million. The proceeds will partially fund an expanded onshore drilling program in the Permian Basin and has funded the redemption of a portion of our Senior Notes due 2016.
  • Reduced the Company’s long term debt outstanding by approximately 22% following the redemption of $31 million face value of Senior Notes, which will reduce 2011 cash interest expense by approximately $3.2 million and $4.0 million for each additional full year through the Notes maturity in 2016.
  • Named a new Vice President and General Manager - Permian Basin Operations and continued to add to our experienced staff to implement and enhance our operational and financial objectives related to our new onshore strategy.

In addition, Regions Bank has agreed to increase the company’s borrowing base from $30 million to $45 million under the company’s $100 million Senior Secured Credit Agreement. Regions Bank also agreed to other improved terms based upon the amounts drawn on the facility. The $45 million borrowing base will be reviewed and re-determined on a semi-annual basis. There are no borrowings outstanding under the Credit Agreement, which matures on September 25, 2012.

“This increase continues to demonstrate Region’s confidence in our operations strategy, our oil and gas assets and our strengthened balance sheet. With $54 million of cash as of the end of the first quarter and the new $45 million borrowing base, we are well positioned to finance new opportunities to expand and grow the company,” explains Bobby F. Weatherly, Executive Vice President and CFO.

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