The company announced it will soon offer 12.5 million shares of common stock in the offering. The underwriters of the offering have a 30-day option to buy up to an additional 1.875 million shares of common stock.
Callon plans to use the proceeds from the offering, along with borrowings from a new secured second lien term loan, to fund the acquisition of oil and gas properties in the Permian Basin. If the company is unable to acquire the properties, it will use the proceeds for general corporate purposes.
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TheStreet Ratings team rates CALLON PETROLEUM CO/DE as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CALLON PETROLEUM CO/DE (CPE) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."