Callon Petroleum Co. and Carrizo Oil & Gas Inc. said Dec. 20 the companies had completed their multibillion-dollar merger.
Earlier on Dec. 20, Callon and Carrizo announced that shareholders from both companies voted to approve its pending merger, which had initially faced shareholder opposition.
Under terms of the merger agreement amended in November, Carrizo shareholders will receive 1.75 shares of Callon common stock for each share of Carrizo stock they own. This represented a reduction to the equity exchange ratio the companies had originally agreed to when the all-stock transaction was first announced in July.
Phillips Johnston, an analyst with Capital One Securities Inc., estimates the amended terms lowered the total transaction value to $2.7 billion from the original $3.2 billion deal value. Callon shareholders will now also own 58% of the combined company, up from the original 54%.
In a statement on Dec. 20, Joe Gatto, president and CEO of Callon, said: “We appreciate the strong support we received for our combination. Together with Carrizo, we are creating a leading oil and gas company that is positioned to accelerate the achievement of our stated goals regarding increasing returns on capital and sustainable free cash flow generation.”
Combined, the company will hold core oil-weighted positions in both the Permian Basin and Eagle Ford Shale with over 100,000 barrels of oil equivalent per day of pro forma production.
Gatto added that as a larger enterprise, the company plans to employ a more efficient scaled development model that will drive a lower cost of supply.
Editor's note: Story was updated from a previous version posted at 12:05 p.m. CST Dec. 20.
Recommended Reading
Exclusive: Rockcliff CEO on $2.7B TGNR Deal, Value of Haynesville M&A
2024-04-10 - Rockcliff Energy CEO and President Alan Smith discusses the ups and downs of executing the transaction with TG Natural Resources and what's on the Rockcliff III radar, in this Hart Energy Exclusive interview.
Aethon Cuts Rigs but Wants More Western Haynesville Acreage
2024-03-31 - Private gas E&P Aethon Energy has drilled some screamers in its far western Haynesville Shale play—and the company wants to do more in the area.
The Answer to Curbing Permian Associated Gas? More M&A
2024-04-03 - Consolidation will result in less oil production, and therefore less associated gas, as fewer wells are produced, an energy analyst says.
Exclusive: Is TG Natural Resources Looking to Snap Up More?
2024-03-27 - At Hart Energy's DUG Gas+ Conference and Expo in Shreveport, Louisiana, TG Natural Resources' President and CEO Craig Jarchow said the integration of the Rockcliff Energy acquisition is well underway and that "being acquisitive is certainly" in the company's future.
Ohio Oil, Appalachia Gas Plays Ripe for Consolidation
2024-04-09 - With buyers “starved” for top-tier natural gas assets, Appalachia could become a dealmaking hotspot in the coming years. Operators, analysts and investors are also closely watching what comes out of the ground in the Ohio Utica oil fairway.