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Home / Business / Callon Petroleum acquires Carrizo Oil in the $ 1.21B merger of Houston firms

Callon Petroleum acquires Carrizo Oil in the $ 1.21B merger of Houston firms




Callon Petroleum said on Monday it will buy Carrizo Oil & Gas at a price tag of over $ 1.2 billion in a combination of two Houston oil producers .

The deal is a merger of nearly as focused exclusively on Texas Shale oil and gas in the thriving Permian Basin and Eagle Ford Shale. The allocation agreement will leave Callon shareholders with a stake of 54 percent and Carrizo investors with 46 percent.


The agreement gives a 25 percent premium on Carrizo's share price from Friday.

Their goal is to focus heavily on the fast-growing Delaware Basin of the Permian as it switches to more of a more repeatable drilling production mode, said Callon's CEO Joe Gatto. The more mature Eagle Ford and Permian assets will help provide cash flow and production at lower capital costs, he said.


RELATED: Callon Petroleum sells assets after the Houston HQ move

"We are thrilled with this transformation transaction, creating a differentiated oil and gas company by integrating core businesses into premier pools," Gatto said.

Callon just moved his headquarters from Mississippi to Houston at the beginning of the year, and the combined company will remain in Houston. 19659019] Over the past couple of years, Carrizo has focused on growing in Permian while selling their other assets in Colorado and the quiet Appalachian Basin closer to the east coast.

The combined Callon will hold about 200,000 acres in Eagle Ford and Permian, including more than 90,000 acres in the Delaware Basin.

The company will have 11 directors, including Callon's eight existing directors and three appointed from Carrizo.

Callon and Carrizo each employ more than 200 people, so some redundancies will be expected where there is duplication.

The agreement is expected to close in the fourth quarter of this year.

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