Houston-based Callon Petroleum Co. on Friday completed its merger with crosstown independent Carrizo Oil & Gas Inc., which expands the Permian Basin footprint and adds a portfolio in the Eagle Ford Shale.
The all-stock deal initially was valued at $3.2 billion when first announced last July, with one Carrizo share traded for 2.05 shares of Callon, giving Callon 54% control. However, the third largest shareholder, hedge fund Paulson & Co. Inc., balked at the terms, and the deal was amended in November, with each Carrizo share exchanged for 1.75 shares of Callon, giving Callon 58% control.
Callon has been a Permian Basin pure-play, but Carrizo, which also has Permian acreage, gives the combination substantial running room in the Eagle Ford Shale. Carrizo as of March 1 had more than 76,500 net acres in the Eagle Ford and about 46,000 net acres in the Permian Delaware sub-basin.
Callon’s combined net acreage would be around 200,000 net acres, with the Delaware leasehold increasing to 90,000 net acres.
Callon first entered the Delaware in 2016 when it purchased 16,098 net acres from multiple Austin, TX-based entities. In May 2018, the company expanded its foothold in the basin when it acquired Cimarex Energy Co.
The combined company is to be led by CEO and President Joseph C. Gatto Jr., who was running Callon. Callon’s James P. Ulm II was named CFO, while COO is Jeff Balmer and general counsel is Micol L. Ecklund. Also appointed to the leadership team were Vice President (VP) J. Michael Hastings of Marketing, VP Liam Kelly of corporate development, VP Jamin B. McNeil of production and VP Michael J. O’Connor, who will oversee the Permian.
Joining Callon’s leadership team from Carrizo is VP Rex Bigler, who will handle asset development, as well as Chief Accounting Officer Gregory F. Conaway and VP Scott Hudson, who will handle drilling and completions.