U.S. independent Callon Petroleum Company will acquire Houston-based Carrizo Oil & Gas, Inc. in an all-stock transaction valued at $3.2 billion, both companies announced Monday. The deal will give Callon 200,000 net acres in the Permian Basin and Eagle Ford Shale – including more than 90,000 net acres in the Delaware Basin – and 2,500 total gross horizontal drilling locations.
Carrizo shareholders will receive 2.05 Callon shares for each share of Carrizo common stock they own. This represents $13.12 per Carrizo share based on Callon’s closing common stock price on July 12. After the transaction closes, Callon shareholders will own 54 percent of the combined company, while Carrizo shareholders will own 46 percent.
“We are excited about this transformational transaction, creating a differentiated oil and gas company by integrating core asset bases in premier basins,” Callon CEO Joe Gatto said in a company statement.
Carrizo CEO S.P. "Chip" Johnson, IV, added that he believed Callon is the ideal partner for Carrizo.
“Through our combination, we bring together a strong foundation of Midland Basin and Eagle Ford Shale assets and overlay a substantial Delaware acreage position and value proposition that will be unlocked through an integrated plan of large-scale program development,” Johnson said. “This all-stock transaction provides Carrizo shareholders with the opportunity to participate in the significant near- and long-term upside potential of the merged company.”
Upon closing, the board of directors of the combined company will have 11 members, including Callon’s eight current board members and three to be appointed from the Carrizo’s board. The combined company will be led by Callon’s executive management team and will remain headquartered in Houston.
The transaction is expected to close in the fourth quarter of 2019.
