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APA Corporation to Acquire Callon Petroleum in a $4.5 Billion Permian Deal

By  |  January 4, 2024

In a strategic move to expand its presence in the U.S. shale patch, APA Corporation has announced its decision to acquire Permian oil and gas producer Callon Petroleum Company in an all-stock transaction valued at approximately $4.5 billion, including Callon’s net debt. The deal, which adds to the recent surge of merger and acquisition activities in the American oil industry, positions APA as a major player in the Permian Basin.

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    With over a decade of experience writing for notable news outlets, Tsvetana Paraskova, a writer for Oilprice.com, reported that Callon’s assets, particularly its extensive holdings in the Delaware Basin, comprising nearly 120,000 acres, will significantly contribute to APA’s operations in the region.

    On a pro forma basis, the combined entity is expected to achieve a production exceeding 500,000 barrels of oil equivalent (boe) per day, and the enterprise value is set to soar beyond $21 billion. This acquisition underscores APA’s commitment to enhancing its scale and operational capabilities in the prolific Permian Basin.

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    The boards of directors of both APA and Callon have unanimously approved the transaction, signaling a pivotal step forward in the merger process. The deal is slated to conclude during the second quarter of 2024, contingent upon customary closing conditions, the termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the approval of the transaction by shareholders of both APA and Callon.

    Following the acquisition, APA’s executive management team will assume leadership of the combined company, with the headquarters maintaining its presence in Houston, Texas.

    This move by APA comes amid a flurry of significant deals in the U.S. oil industry. In October, Exxon made headlines with its announcement to acquire Pioneer Natural Resources in a substantial all-stock transaction valued at $59.5 billion, with an implied total enterprise value of approximately $64.5 billion, including net debt. The industry’s dynamic landscape continues to witness consolidation, as key players position themselves strategically to navigate the evolving energy market.

    Source: Oil Price