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Callon wraps up note exchange

NATCHEZ — Callon Petroleum Company has completed and released the results of its offer to exchange any and all of its outstanding 9.75 percent senior notes due 2010. The exchange offer, which was originally scheduled to expire Nov. 18 but was extended to allow time to complete qualification under the Trust Indenture Act, expired Nov. 23. The settlement date of the exchange offer was expected to be Nov. 24.

As of the expiration date, according to the depositary for the exchange offer, the company received valid tenders from holders of approximately $184 million aggregate principal amount of senior notes. The senior notes validly tendered and accepted will be exchanged into approximately $138 million in principal amount of 13 percent senior secured notes due 2016 and 3,793,928 shares of common stock and 310,412 shares of convertible preferred stock.

Each share of convertible preferred stock will be automatically convertible by Callon into 10 shares of common stock following shareholder approval of, and the filing of, an amendment to the company’s charter increasing the number of authorized shares of common stock as necessary to accommodate such conversion. In addition, under the rules of the New York Stock Exchange, the shareholders must approve the issuance of the shares upon conversion of the convertible preferred stock. The exchange notes will be secured by a second lien on substantially all of the company’s oil and gas properties until such time as certain conditions are met.

The securities to be offered have not been, and will not be, registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The company has relied on Section 3(a)(9) of the Securities Act to exempt the exchange offer from the registration requirements of the Securities Act.


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