Callon Petroleum Company announced Monday its subsidiary, Callon Petroleum Operating Company, closed on the sale of its 11.25 percent working interest in the Habanero field (Garden Banks Block 341). The company sold its interest in Habanero to Shell Offshore Inc., a subsidiary of Royal Dutch Shell, for an estimated net cash consideration of $39.5 million after customary purchase price adjustments.
Callon used the proceeds from the sale to reduce outstanding borrowings on its revolving credit facility, providing additional liquidity to fund the company's 2013 capital program. The administrative agent of Callon's revolving credit facility has notified the company that the revised borrowing base under the facility will be $65 million following the Habanero sale. The borrowing base will be redetermined as scheduled in the first quarter of 2013 based upon the evaluation of year-end proved reserves.
Fred Callon, chairman and chief executive officer, commented, "The sale of our Habanero interest enables us to pay down a significant portion of our revolving bank debt and strengthen our balance sheet as we focus our efforts on the Permian Basin. This additional financial flexibility will position the company to pursue horizontal program development of our Southern Midland assets while continuing to evaluate our Northern Midland position for future development operations."
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