Callon Petroleum Co., Natchez, Miss., (NYSE: CPE) has redeemed $31 million of its outstanding $138 million 13% senior notes due 2016 using a portion of the proceeds from its previously announced common stock offering, which was completed on Feb. 16. The redemption was made in accordance with the terms of the indenture governing the notes and the terms of the notice of redemption.

The notes were redeemed at a redemption price of 113% of their face amount, plus accrued and unpaid interest to and including March 19. The total redemption price was approximately $35.9 million, including approximately $0.9 million in accrued interest. Upon completion of this partial redemption, approximately $107 million face amount of the notes remains outstanding.

"The $31 million redemption of the notes further strengthens our balance sheet and is expected to improve our profitability," Bob F. Weatherly, executive vice president and chief financial officer, explains. "We will save cash interest of approximately $4 million per year or approximately $22 million over the remaining life of the notes."

Weatherly adds that since 2008, Callon has reduced the face value of total long-term debt by 62%. "De-leveraging our balance sheet has been a key objective for supporting our strategic plan to transition our operations from offshore Gulf of Mexico to longer life lower-risk onshore oil and gas plays that offer the potential for long-term visible growth," he says.

Callon is engaged in the acquisition, development, exploration and operation of oil and gas properties in Louisiana, Texas, and the offshore waters of the Gulf of Mexico.