Callon Petroleum Company has been engaged in the exploration development acquisition and production of oil and gas properties since 1950. Callon Petroleum Company has a market cap of $48.7 million; its shares were traded at around $2.25 with a P/E ratio of 4.8 and P/S ratio of 0.3. Callon Petroleum Company had an annual average earning growth of 12.6% over the past 5 years.
Highlight of Business Operations:On September 25, 2008, we completed a $250 million second amended and restated senior secured credit agreement with UBOC as issuing lender, which matures September 25, 2012. The borrowing base, which will be reviewed and redetermined quarterly beginning August 1, 2009, is $48 million. Borrowings under the credit agreement are secured by mortgages covering our major fields excluding Entrada. As of March 31, 2009, there were no borrowings under the agreement; however we had a letter of credit outstanding in the amount of $15 million to secure the drilling rig, Ocean Victory, for the development of Entrada. As a result, $33 million was available for future borrowings under the credit agreement as of March 31, 2009. See Note 4 to the Consolidated Financial Statements.
Subsequent to March 31, 2009, Diamond Offshore Drilling, Inc. (Diamond) called on the outstanding letter of credit for CIECO Energy (US) Limiteds (CIECO) share of the settlement for the termination of the Ocean Victory drilling contract in the amount of $7.3 million. We paid our share, in the amount of $7.3 million, in March 2009. The remaining balance of the letter of credit was cancelled on April 2, 2009 by Diamond. As a result of these transactions, $40.7 million was available for future borrowing as of April 2, 2009. We continue to discuss with CIECO its failure to fund the settlement for the termination of the drilling contract. The $7.3 million due from CIECO for their share of the settlement for the termination of the drilling contract is recorded as a receivable.
On April 8, 2008, we completed the sale of a 50% working interest in the Entrada Field to CIECO for a purchase price of $175 million with a cash payment of $155 million at closing and the additional $20 million payable after the achievement of certain production milestones.
Simultaneously with the closing of the CIECO transaction, we used the proceeds from the sale, cash on hand and a draw of $16 million from the UBOC credit agreement, to extinguish the $200 million senior secured revolving credit agreement, which was secured by a lien on the Entrada properties. Due to the early extinguishment of the $200 million senior revolving credit facility on April 8, 2008, we incurred expenses of $11.9 million consisting of $6.3 million in cash pre-payment penalties plus a non-cash charge of $5.6 million related to the amortization expense associated with the deferred financing costs related to the credit facility.
Gas production during the first quarter of 2009 totaled 1.4 billion cubic feet (Bcf) and generated $8.9 million in revenues compared to 2.1 Bcf and $19.9 million in revenues during the same period in 2008. The average gas price after hedging impact for the first quarter of 2009 was $6.13 per thousand cubic feet of natural gas (Mcf) compared to $9.50 per Mcf for the same period in 2008. Approximately 28% of the 31% decrease in 2009 production was due to a lower number of producing wells, with the remaining 3% resulting from normal and expected declines in production from our older properties. Four of our gas wells were shut-in during 2008 due to early water production and are now scheduled for plugging and abandonment. In addition, our High Island Block A-540 well was shut in during the second quarter of 2008, due to a plugged flowline, which management has determined uneconomic to repair.
Oil production during the first quarter of 2009 totaled 263,000 barrels and generated $16.0 million in revenues compared to 290,000 barrels and $25.1 million in revenues for the same period in 2008. The average oil price received after hedging impact in the first quarter of 2009 was $60.59 per barrel compared to $86.66 per barrel in the first quarter of 2008. The 9% decrease in 2009 production was attributable to normal and expected declines in production and our High Island Block A-540, described above.
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