Permian-focused Callon explains merger plans with Eagle Ford E&P

By Luke Geiver | September 30, 2019

Callon Petroleum has released new information highlighting why the Permian pure-play operator will be better off as an exploration and production company that has merged with Carrizo Oil and Gas.  

Founded in 1950, Callon revealed plans this year to acquire an Eagle Ford operator and its assets. Callon entered the Permian in 2009 and has been developing a position and expanding since.  Through an all-stock deal, Callon believes it will be able to bolster its Permian focus while gaining from the Eagle Ford assets of Carrizo Oil & Gas LLC.

"The strategic and financial benefits of Callon's combination with Carrizo are compelling," said Joe Gatto, president and Chief Executive Officer of Callon. 

According to Gatto, the benefits of the combined company will enable Callon to accelerate its free cash flow, capital efficiency and deleveraging goals through an optimized model of large-scale development.

Upon closing, Gatto believes the company could add $300 million to $400 million through the sale of select Eagle Ford acreage acquired in the deal and the sale of non-operated Permian properties or the pruning of non-core Delaware Basin properties.

Callon’s Board of Directors evaluated several options for Callon over the past two years before agreeing to add Carrizo. Upon approval, Callon shareholders will own approximately 54 percent of the combined company, and Carrizo shareholders will own approximately 46 percent, on a fully diluted basis.