Callon begins exchange offer, consent solicitation for 9¾% notes

By Angela McDaniels

Tacoma, Wash., Oct. 20 - Callon Petroleum Co. has begun an exchange offer and consent solicitation for its 9¾% senior notes due 2010, according to a company news release.

For each $1,000 principal amount of notes tendered, holders will receive $750 principal amount of 13% senior secured notes due 2016, 20.625 shares of common stock and 1.6875 shares of convertible preferred stock.

Each preferred would be automatically convertible by the company into 10 shares of common stock following shareholder approval and the filing of an amendment to the company's charter increasing the number of authorized shares of common stock.

The company is soliciting consents to amend the indenture governing the notes to eliminate substantially all of the restrictive covenants.

Holders who tender must consent to the proposed amendments.

The offer will expire at 5 p.m. ET on Nov. 18.

The exchange offer is conditioned on the tender of at least 80% of the outstanding notes. The company said that holders of about 73.5% of the notes have committed to tender their notes.

The information agent is Global Bondholder Services Corp. (866 952-2200). Questions can also be directed to Callon Petroleum at 800 451-1294, extension 700.

Callon Petroleum is an oil and gas exploration and development company based in Natchez, Miss.

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