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Callon Petroleum Completes Acquisition Of Delaware Basin Oil And Gas Assets From Primexx For US$788 Million


Marketline - Deals  

 

    Deal In Brief

    Callon Petroleum Co, an oil and natural gas company, has completed the acquisition of leasehold interests and related oil, gas, and infrastructure assets located in Delaware Basin from Primexx Energy Partners, a private oil and gas operator backed by Blackstone, for a purchase consideration of $788 million

    The company funded the consideration through the payment of $440 million in cash and through the issuance of 9.19 million shares to Primexx. The cash portion of the consideration has financed using available capacity under the current credit facility with near-term repayment coming from forecasted free cash flow and proceeds from in-process divestiture initiatives

    Concurrently, Callon Petroleum has entered into an agreement to sell non-core acreage in the Eagle Ford Shale for cash proceeds of approximately $100 million

    The assets include 35,000 net acres in Reeves County and has net production of approximately 18,000 barrels of oil equivalent per day (boed) (61% oil) second quarter 2021

    Citi acted as exclusive financial advisor and Gibson Dunn & Crutcher LLP acted as legal advisor to Callon. RBC acted as exclusive financial advisor and Kirkland & Ellis LLP acted as legal advisor to Primexx in the transaction

    The acquisition enables Callon to increase its Delaware Basin position to over 110,000 net acres

    Callon President and Chief Executive Officer Joe Gatto commented, “We are excited to get to work integrating this high-quality asset base into our Permian Basin operations, overlaying our life of field development philosophy on the acquired multi-zone resource base. Given our deep subsurface expertise in the Delaware Basin and operational preparation, we expect a seamless transition and will be focused on delivering the types of capital and expense synergies we have achieved in similar transactions. As we look ahead into the coming quarters, this latest acquisition provides a meaningful increase in free cash flow generation and is a catalyst for substantially improving the balance sheet.” The transaction implies values of US$43,777.78 per boe of net daily production and US$22,514.29 per net acre of land

    Deal history Announced: On August 4, 2021, Callon Petroleum has entered into an agreement to acquire the leasehold interests and related oil, gas, and infrastructure assets located in Delaware Basin from Primexx Energy for a purchase consideration of $788 million.

    Deal Value (US$ Million) 788
    Deal Type Acquisition
    Sub-Category Asset Purchase
    Deal Status Completed: 2021-10-05

    Deal Participants

    Acquirer (Company) Callon Petroleum Company
    Vendor (Company) Primexx Energy Partners Ltd

    Deal Rationale

    The acquisition enables Callon to increase its Delaware Basin position to over 110,000 net acres.

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